E-Commerce Fraud- what is it and why is it happening?

E-Commerce fraud is an escalating risk for online sellers. As online sales have increased, unfortunately, so have opportunities for people to take advantage of vulnerable businesses in the e-commerce space.

In order to ensure their businesses are fully secure online, many businesses are utilising specialised customisation services so that they can make the most of the available online security software, regardless of which e-commerce platform they use. 

With a large amount of credit card information stored and transferred online, it has become easier for hackers to steal customers and merchants account information.

There have been notable instances of mutations of old types of fraud including account takeover attacks, chargebacks and transaction fraud.

It is also notoriously difficult to detect online fraud and source the correct fraudster.  There is a distinct lack of policing in the area as the impact of the crime tends to be of lower value (similar to grocery store shop lifting).

Furthermore, online fraud is usually conducted across borders, making it even more difficult to track the fraudster and impose a sanction.

There have been notable instances of mutations of old types of fraud including account takeover attacks, chargebacks and transaction fraud.

Takeover Attacks

Takeover attacks, also known as ATO attacks occur when a malicious actor gains access to a legitimate consumer e-commerce account, obtaining full control in order to use it for fraudulent purposes.

Methods can range from credential stuffing, to multiple login attempts using common usernames and passwords.

Chargebacks 

Chargebacks occur when. customers contact their credit card issuers to dispute charges. If the dispute is valid, the e-commerce merchant is required to pay the amount owed for the transaction plus a chargeback free from the processor. This can cost anywhere from $15 to $100.

Chargebacks are a form of consumer protection provided by card companies and although sometimes they may be the result of an honest mistake, some customers may have malicious intentions. 

Whilst large companies like Amazon and Ebay can bear the brunt of these chargeback losses, smaller e-commerce businesses are liable to suffer; particularly since merchants can be subject to penalties if chargebacks exceed a defined threshold.

Transaction Fraud

Transaction fraud is when an illegal or false transaction is made in an online store. The key difference between in-store and online payment fraud is that a debit or credit card doesn’t need to be physically present when you make the online transaction.

All that is required is the card information, which is increasingly easier to access given that card details are often stored digitally or in key chains.

E-Commerce Fraud- Fully Customised Preventative Solutions 

Given the lack of policing in the e-commerce fraud area, the best approach merchants can take is a preventative one.

OPMC have a number of plugins and integrations available that can help you safeguard your online business. It is worth noting however, that online security and fraud protection is not necessarily a ‘one size fits all’ approach.

Applying ready-made, uniform security solutions may be an acceptable approach in the short term, but the recommended approach is to have a bespoke security solution, tailored specifically for your business.

If every online business was to use the same security software, it would only take one hacker to ‘pick the lock’ and all of those businesses security systems are suddenly put at risk.

Having a tailored and specialised security integration solution will effectively safeguard your business and keep it ahead of the pack.

OPMC have years of experience integrating security services and plugins with e-commerce stores.

If you operate an e-commerce store that isn’t compatible with WooCommerce, but you want to make the most of some it’s plugins (like WooCommerce Anti Fraud) OPMC can fully integrate your preferred plugin or extension with your e-commerce platform.

Plugin Fast Track Solutions

If an off the shelf solution is your preferred approach for now, the WooCommerce Anti-Fraud plugin is designed to help you pick up  transactions and catch them as they happen – by scanning and providing a score for each completed transaction made via your online store, based on a set of advanced scoring rules

OPMC recognised early in the developmental process of anti-fraud software that it would be useful to have a plugin that could easily integrate with an external security service.

The WooCommerce Anti-Fraud plugin was therefore developed with this in mind and has capacity to be integrated with minFraud® services by MaxMind on their online store.

If an off the shelf solution is good fit for your business, but you feel the solution is missing a few components that would truly optimise your business, OPMC also offers a plugin fast track service.

This service allows you to make minor alterations and additions to an existing plugin, ensuring you’re getting the most out of the software you install.