Online retailers are being targeted by e-commerce fraud. Here’s what you need to know about the many types of scams and how to avoid them.
The good news is that the e-commerce market is growing, but the bad news is that e-commerce fraud is growing as well. Especially during the next holiday season, online businesses should be aware of the challenges they face and how to address them.
As online and mobile sales rise, experts predict that by 2022, more than 17% of B2C transactions will be made online globally, according to statistics from 451 Research. The growth of the e-commerce industry attracts both merchants and fraudsters.
Given this situation, responsible businesses should be aware of the threat they are up against. If you’re an online shop or business owner, you’ll be interested in learning how to prevent online fraud, particularly during the holiday season.
1. Fraudsters are attracted to the growth of e-commerce.
The income from online retail sales in the United States reached $211.5 billion in the second quarter of 2020, according to the Census Bureau of the United States Department of Commerce. One of the causes could be the ongoing pandemic, which is keeping people at home in many locations and has no end date.
People are compelled to shop online, and stores are forced to do so in order to survive the pandemic. Bang! A two-edged weapon emerges, capable of cutting both ways. It removes consumer constraints on where and when they can purchase, as well as store physical door locks, exposing vendors to a potentially dangerous internet environment.
Bad actors swoop in to take advantage of this burgeoning industry by exploiting e-commerce store vulnerabilities and wreaking havoc on the internet. E-commerce fraud is the term for what they do to devastate internet stores.
2. What is the definition of e-commerce fraud?
Any type of fraud that occurs on an online shopping platform is referred to as e-commerce fraud. Typical fraudster tactics include the use of stolen or fake credit cards, bogus identities, and false personal information, among others. E-commerce fraud refers to any form of fraudulent or erroneous online transaction.
Account Takeover Fraud is one of the most common types of fraud.
The first step in a sequence of e-commerce fraud is usually ATO fraud. It’s a type of online identity theft in which a malevolent actor illegally takes control of internet accounts and accesses personal information (i.e., passwords, credit cards, email, bank accounts, SIM cards, and more).
Bad actors utilize stolen accounts to do illegal acts such as utilizing bots to place false bulk orders in order to deplete sellers’ inventories. Since we last saw, ATO fraud has become more common than ever. News from Brinkwire in a nutshell.