E-Commerce Fraud Signs and Prevention

E-commerce fraud is an illegal transaction performed on an e-commerce platform by a fraudster. The best way to combat this fraud is by first identifying the type of fraud that is occurring on your platform, and then address it directly. The most common e-commerce fraud signs include: –
  1. Dubious Phone Calls
  2. Random Emails
  3. Unknown Text Messages
  4. Multiple Declined Transactions from the Same Customer
  5. Unverified Wire Transfer Requests
  6. Unusual Location
  7. Multiple Shipping Addresses
  8. Multiple Orders from Different Credit Cards
  9. First Time Customers
  10. Unexpectedly Large Orders
  11. Any Data that is Clearly Fake
As an E-Commerce business operator, these are the steps you can take to prevent fraud: –
  1. Conduct regular site security audits to ensure that: –
    1. Your shopping cart software and plug-ins are up to date
    2. Your SSL certificate is current and working
    3. You often back up your online store
    4. You are using strong passwords for admin accounts, Database and Content Management System (CMS).
    5. You scan your website regularly for malware
    6. You are encrypting communication between your store and customer suppliers
  2. Monitor your site regularly for suspicious activities. This involves monitoring your accounts and transactions for red flags, such as inconsistent billing and shipping information, as well as the physical location of your customers.
  3. Use an Address Verification Service (AVS) to detect suspicious credit card transactions in real-time and prevent credit card fraud as the service helps check the billing address submitted by the card user with the cardholder’s billing address that is on file with the issuing bank.
  4. Require Card Verification Value (CVV) numbers for all purchases to ensure that customers have the physical credit card in their possession. This helps to keep you safe and reduces fraud.
  5. Avoid collecting too much sensitive customer data. Only collect the data you need to complete a transaction and ship the products to avoid hackers and data breach.
  6. Try an anti – fraud Solution. There are a variety of software solutions to suit your needs and your budget.
  7. Use phone number authentication. This can further be made stronger by giving the one-time password an expiration of minutes or hours, which prevents hackers from gathering old passwords to use.
  8. Implement fraud prevention policies e.g. require a buyer’s signature upon receipt of the shipment, limit the number of declined transactions you can run for the buyer and consider not accepting credit cards from certain locations, instead give the shoppers alternative global modes of payment.
  9. Set limits for the number of purchases and total dollar value you will accept from one account in a single day. This reduces your exposure to a minimum should fraud occur.
  10. Avoid non-physical shipping addresses.


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