Learn how to prevent e-commerce fraud

Research conducted by ClearSale found that e-commerce fraud attempts increased by 23.6% in the first quarter of 2022 compared to the same period in 2021.

Mobile phones are the leader in the ranking of categories with the most fraud attempts with 7.1% of total sales. It is followed by electronics (7%), information technology (5.4%), air conditioners (4.8%) and automotive products (4.7%).

The main goal of fraudsters is to gain financial or personal benefit, which can cause financial or even psychological harm to the victim.

Part of the reason e-commerce fraud has grown so much is that many scams are so sophisticated that the criminal doesn’t get caught.

It is important to remember that e-commerce fraud is directly related to chargebacks, which are nothing more than a purchase dispute that customers have with their banks. Therefore, it is crucial to combine the use of anti-fraud systems with good security practices.

The main types of fraud

To effectively combat it, it is important to understand the main types of e-commerce fraud. Check out the main types of scams in virtual stores below.

1. Interception fraud

This happens when fraudsters place an order on your website using a stolen credit card.

Once the order is placed, they intercept the order while it is on its way to the delivery address and collect the goods.

2. Card test fraud

Card testing is a sophisticated e-commerce scam. This occurs when an individual gains access to one or more stolen credit card numbers.

Even if they have card numbers, criminals do not know if they can be used and if they have a limited limit.

Therefore, fraudsters choose to shop online and make small purchases to quickly test multiple credit card numbers.

3. Identity theft

In the first half of 2022, Brazil recorded more than five thousand identity fraud attempts per hour, according to research conducted by Idtech Unico.

In this type of e-commerce fraud, fraudsters use someone else’s identity to create credit cards and make online purchases. As the data is valid, identification is difficult.

4. Collection of invoices

Account takeover fraud occurs when someone gains access to a user’s account on an e-commerce site or website. After gaining access to the user account, he changes the delivery address and makes a purchase with the customer’s card.

5. Friendly fraud

Friendly fraud is when someone buys an item or service and requests a refund, claiming the transaction was invalid. Credit card operators or bank operators refund the purchase amount to the customer, which must still be paid by the merchant.

This scam is usually used to receive items for free by claiming that the item was never delivered or by notifying the credit card issuer that the item was returned to the merchant and requesting a refund.

Finally, the consumer may not recognize the name of the store that appears on the bill and request a refund by mistake.

How to avoid fraud in e-commerce?

Website security is essential to give consumers peace of mind, convey credibility and prevent fraud. To do this, invest in:

• SSL Certificate (Secure Sockets Layer): enables an encrypted connection, limiting the work of hackers and ensuring the privacy of information;
• Reliable payment methods: ensure that the means of payment used are secure, enabling purchases without the risk of data leakage;
• Adapt your e-commerce to the LGPD (General Data Protection Act): make sure your store complies with the standards set by law. The agreement prevents fraud and data leakage.

In addition, it is important to pay attention to the average map of your e-commerce. This allows you to take a closer look at purchases that have a much higher value.

For example, let’s say the average amount customers spend in your online store is R$200. In this case, purchases above R$500 are suspect, especially if they occur without the incentive of a major promotion or commemorative date.

Investing in security and knowing the average map of your virtual store is important. However, these actions will not be enough given the sophistication of fraud in today’s e-commerce.

In this sense, it is ideal to combine these factors with technology, with an anti-fraud system.

The anti-fraud solution will work by cross-referencing and analyzing various consumer data such as purchase patterns, devices used, location and more.

In this way, it is possible to safely and safely assess whether the purchase is legitimate. Or, nevertheless, to find out when there is something really suspicious and investigate thoroughly.

If the possibility of fraud is confirmed, the system automatically blocks the purchase.

Anti-fraud system in e-commerce

In e-commerce, the anti-fraud solution will work by cross-referencing information from numerous sources, analyzing a number of factors, such as the customer’s personal data, location and behavior patterns, both of the person and of the device being used.

In this way, it can be assessed when the purchase is legitimate, and it can be put into circulation or, in doubtful cases, more detailed analysis can be carried out. When fraud is confirmed, the system blocks the trade.

In order for the anti-fraud system in e-commerce to perform its analysis as reliably as possible, a number of technological features are put into practice, such as geolocation, big data, machine learning, data confirmation, security code, among others.

In this sense, an anti-fraud system in e-commerce guarantees many benefits, such as reduced losses and chargebacks, greater protection and customer satisfaction, more convenience and savings for the merchant.