An e-commerce business is built on electronic transactions made to charge the customers for products and services delivered. The increased benefits of e-commerce and credit/debit card transactions have resulted in an increase in fraudulent activities.
E-commerce fraud is also referred to as "Payment Fraud." It means any type of false or illegal transaction made by a cyber criminal which deprives people of their funds, personal property, interest or any sensitive information with the help of Internet.
E-commerce fraud is characterized in three ways, namely:
Fraudulent or unauthorized transactions
Lost or stolen product
False requests for a refund, return or bounced checks
Types of e-commerce fraud-
Phishing: Emails or websites that demand personal or private information, such as credit card, bank account or login details, are mostly prone to phishing. Only trusted sources, such as a partner with a bank, is trustworthy.
Identity theft: When personal information is stolen and used under false deception, it leads to identity theft. Hackers invade into your personal information through old security systems or by hijacking login credentials via public Wi-Fi.
Page jacking: Page jacking occurs when offenders steal the contents of any website by copying and putting them on a site that appears to be legitimate, inviting people to the illegal site by deceptive means. E-commerce business owners should be aware of any suspicious online activity that occurs on their website.
Advanced fee and wire transfer scams: If you are a credit card user or an e-commerce store owner, the hacker targets you by asking for money in advance in return for a credit card or money at a later date.
Merchant identity fraud: When the offender makes a fake merchant account that appears authentic and then vanishes before you discover the fraudulent payments and reverse the transactions.
6 ways in which your personal data maybe stolen for e-commerce fraud are, namely:
Email
Texting malware to smart phones
Instant messaging
Re-routing traffic to fraudulent websites
Phone calls
Online auctions
Tips to protect your e-commerce business against fraudulent payments:
Stay aware of the latest fraud trends
Partner with a verified payment processor
Encrypt transactions and emails containing confidential information
Ensure that tokens and login details are regularly changed
Establish a policy regarding access to confidential information
Constantly run security checks with antivirus software
Require customers to log in to an individual account prior to making a purchase