According to research conducted by Javelin Strategy & Research , about 16.7 million people fell victim to fraud in 2017. In 2018, the number fell to 14.4 million people thanks to the adoption of anti-fraud measures taken up across various industries. However, in all these scenarios, billions of dollars were lost.
Every day, scammers look for new ways of extorting money and goods from wary customers and businesses. In 2017, the number of e-commerce fraud cases increased due to the increase in the use of EMV-chip technology. These fraud losses led to a rise in the cost of online and digital goods in that year as well.
In most cases, the most prevalent forms of fraud e-commerce fraud exist in the form of identity fraud and “friendly fraud.” In identity fraud, cybercriminals may target an e-commerce store by using stolen credit and debit cards, and this may incur significant business losses. Similarly, a business may suffer from “friendly fraud” where customers make an online purchase and then claim a refund/chargeback from the credit card company.
Fraud schemes evolve with each passing day. Securing an e-commerce store from fraud may help to avoid losses and ensure that the business owner is in control. However, managing the risks may necessitate a multi-directional approach by taking one or more of these measures:
Use E-Commerce Fraud Protection Services
Using fraud protection services can shield a business from extortion by fraudsters. The systems put in place should include a chargeback provider to ensure that they are not wrongful for online customers.
Protection of Intellectual Property
Where digital goods are concerned, the seller should have a good understanding of the ownership of intellectual property. In case the seller is producing a unique product, acquiring patent rights may be of great importance. Similarly, if the seller is in the business of reselling goods, he/she should have a good understanding of the source of the products and the patent/intellectual rights involved. In either case, hiring intellectual property protection attorneys may be in the e-commerce business owners’ best interest.
Use Verification Technology
When combating identity fraud, businesses should pay special attention to the physical as well as digital aspects. There should be conformity in payment and delivery. For instance, phone numbers, email addresses, and location should be verifiable. Where there is a difference in the user and recipient, the system should be able to detect and inform the person in charge to ascertain the authenticity of the transaction.
In business, entrepreneurs realize a profit by minimizing losses. In the e-commerce industry, making precautions and reducing the risk of fraud is one way of avoiding unnecessary losses. In the end, the business owner, as well as the customers, are protected from fraud.