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It seems that cybercriminals aren’t planning to disappear any time soon. The global pandemic left a huge mark on the e-commerce sector, making it a perfect place for online crime. Here, online criminals have mastered their dangerous scamming techniques, and that’s why the fraud numbers have skyrocketed in recent years.

While the term ‘E-commerce fraud’ is pretty self-explanatory, the reality is that many business and e-commerce players still struggle with maintaining effective security strategies. It’s clear that the convenience of speedy online services attracts many customers, but the real question is, what do businesses do in terms of security?

In this article, we inspect fraud types that are widely popular in e-commerce. Keep on reading and find out more about them and how not to fall into fraudsters’ traps.

  1. Interception fraud

With this type of fraud, the goal is to intercept the ordered parcel before it reaches the listed address. Interception fraud uses sensitive data that’s obtained by cybercriminals. For example, fraudsters buy items from your e-commerce store using a stolen card, but they manage to avoid checks by registering real shipping information.

  1. Stolen identity fraud

No matter the time or context, identity theft will always remain the most dangerous type of fraud. In the digital era, it has become a concern for online retailers, banks and fintechs, credit companies, and everyone else who has money flow going into their organization. Identity theft is very threatening to users because it opens many doors for fraudsters.

Once they obtain personal details, such as addresses, credit card information, and full names, online scammers use the illegally obtained data to commit further crimes: make online purchases, transfer funds, and use medical insurance. Hackers also tend to sell such data on the dark web.

The solution’s simple. E-commerce players need to implement safe and secure identity verification that prevents suspicious users, or fraudsters using stolen identities from gaining access to their services. Typically, a secure ID verification procedure:

  • Is remote, fast, and user-friendly.
  • Is powered by artificial intelligence to ensure security.
  • Detects fraudsters instantly, minimizing the chances of human error.
  • Scans and reviews ID documents to ensure that they are legit.
  1. Chargeback fraud

Sometimes, chargeback fraud is classified as a friendly fraud type, especially when the card owner benefits from the situation. In general, chargeback fraud happens when a user makes a legitimate online purchase but flags the transaction as fraudulent. The goal in this scenario is to receive a full refund from the card company.

In cases of a more ‘friendly’ version of this chargeback fraud, the card owner can demand a refund because they regret the original transaction, don’t remember making the purchase, or had their card used by someone else. Other, more malicious cases involve fraudsters that aren’t related to the actual card owner.

Due to the little knowledge that’s required to participate in such a scheme, chargeback fraud is the most common type of fraud in e-commerce. It can result in lost items, excess bank fees, loss of revenue, time resources, and bank card black-listing. Businesses can reduce chargeback fraud by following these basic tips:

  • Monitor and check your orders regularly. If the customer makes small purchases frequently but uses different billing addresses – it’s a sign of potential fraud.
  • Send automated confirmation letters to your customers. This method makes it more complicated for the customer to claim that they haven’t made any purchases.
  • Use only trusted card verification tools. Also, don’t forget to include detailed transaction data. It should have your business name listed.
  1. Card testing fraud

At first, card testing fraud starts with small amounts, and that’s why it’s called this way. Usually, criminals illegally obtain your credit card digits. Once they have such sensitive data, they use it for online purchases.

The goal is not to draw too much attention; otherwise, fraudsters are risking getting caught. Once they complete the initial test, cybercriminals move to make larger purchases. In general, card testing fraud is dangerous since it starts slow but can quickly evolve into the loss of thousands of dollars.

  1. Account takeover fraud

Account takeover fraud is exactly as it sounds because it happens when a fraudster gains access and takes over a customer’s account. This can also happen when a scammer takes over an employee’s or a business account with the goal to steal sensitive data. To achieve this, scammers pose as an official account.

Typically, bad actors use bots these days to automate the process of brute-force attacks that lead to gaining access to legitimate accounts. Online retailers can follow some simple fraud prevention methods to protect users and their data from account takeover fraud:

  • You can use special fraud prevention tools to block bots. By associating various login attempts with bots, you can prevent suspicious users from entering your e-commerce platform.
  • Add accurate visitor authentication methods. This way, you’ll use multi-layer security that requires additional checks before welcoming visitors or new users.


E-commerce retailers need to be aware of cybersecurity threats. Alarming statistics show that data breaches and identity theft are now more common than ever, putting in danger many organizations that don’t use proper security tools. While it’s a huge convenience to shop without needing to head out of your home, customers today have high standards and expect to have their data fully protected at all times.

The post 5 Fraud types that are used to target e-commerce retailers appeared first on HR News.