Summary: The good news is that the size of the e-commerce market continues to grow, while the bad news is that e-commerce fraud is on the rise as well. Online retailers need to know what they’re up against and how to deal with it, especially during the upcoming holiday season.
As online and mobile sales increase, experts have predicted that more than 17% of B2C sales globally will occur online by 2022, citing data from 451 Research. The expansion of the e-commerce industry is attracting retailers and even more fraudsters.
In these circumstances, responsible companies should be aware of the type of threat they face. If you are an online retailer or a business owner, you would like to know the solutions to prevent online fraud, especially during the holiday season.
1. The growth of e-commerce attracts fraudsters
According to the Census Bureau of the United States Department of Commerce, online retail sales revenues in the United States reached $ 211.5 billion in the second quarter of 2020. One reason could be the ongoing pandemic that is keeping people alive. at home in many areas, and no one knows when it will end.
(Photo: Global e-commerce retail market size 2014-2023 | Statista)
People are forced to buy online and stores have no choice but to move online to survive the pandemic. Snap! A double-edged sword comes out, and it can cut both ways. It removes restrictions on where and when to shop for consumers and eliminates physical locks on store doors, exposing sellers to a risky cyber environment.
(Photo: Lexis Nexis 2020)
Bad actors are rushing in and exploiting this burgeoning industry by abusing vulnerabilities in e-commerce stores and ravaging the internet. What they do to destroy online stores is commonly referred to as e-commerce fraud.
2. What is e-commerce fraud?
Ecommerce fraud refers to any type of fraud that occurs on an online shopping platform. Typical tips for scammers include using stolen or forged credit cards, fake identities, fraudulent personal information, etc. Ecommerce fraud is basically any type of illegal or erroneous online transaction.
3. Types of fraud to watch out for
Account takeover fraud
ATO fraud is usually the first step in a series of e-commerce frauds. It is a form of online identity theft where a malicious actor illegally takes possession of online accounts and access confidential data (ie passwords, credit cards, e-mail, bank accounts, SIM cards, etc.).
Bad actors abuse stolen accounts to commit illegal acts, such as using bots to automatically place fraudulent bulk orders to make seller inventory unavailable. ATO fraud has become more prevalent than ever since we saw a sharp increase in data breaches this year.
Credit card fraud
Credit card fraud (or carding) is similar to ATO fraud in its operation. However, ATO fraud focuses on the login page, while credit card fraud targets the payment page.
Scammers use the stolen card information to gain access to bundles and batches of credit cards and then repeatedly buy things with the cards on an online shopping platform (using automated bots in most cases). This type of transaction harms the cardholder and scams the store owner because, at the end of the day, he has to pay back all the stolen money.
Gift card cracking
As a variant of credit card fraud, gift card cracking targets less secure gift cards that are anonymous and sometimes password-less. Scammers use brute force to list numbers in order to obtain valid gift card numbers.
After that, the scammers check the card balance and sell them or use them to repeatedly buy products from the online store. This type of fraud apparently does not result in a significant loss for the store owner, but it does also undermines consumer confidence and brand image if the scam continues.
Inventory refusal is more subtle and sophisticated than others. Scammers create out-of-stock products or services by adding them to shopping carts online, but never at checkout. It can drastically restrict online retail business from prevent customers from placing orders that not only damage the company’s reputation but also impact revenue stream.
4. Ecommerce fraud increases during the holiday season
Time is passing. The holiday season is fast approaching. Online retailers expect a big “harvest” and so do scammers. Every year during peak season, online retailers are haunted by e-commerce fraud much worse than usual, especially during Black Friday and Cyber Monday sales. Research finds a Suspicious e-commerce frauds rise 14% over the holiday weekend of 2020 compared to the whole of 2020.
Sophisticated robots have become the preferred tool of bad actors and fraudsters. Without reliable countermeasures, bots can turn holiday shopping campaigns into a holiday disaster.
5. Secure e-commerce site with GeeTest Solutions
Have you ever thought about how bots sneak into your website and do all the wrong things? GeeTest has found the answer to be pretty obvious: bots are disguised as real customers.
First, they have many devices (through which they have access to online stores)
Then they get fake identities (which are hard to tell the difference between the real ones)
The last step is to forge human behavior when interacting with websites.
When you learn about the three methods of scammers, it is easy to eliminate the threat. With this in mind, GeeTest has developed the game-changing bot management product: GeeTest 4.0 CAPTCHA – Adaptive CAPTCHA.
CAPTCHA (fully automated public Turing test to distinguish between computers and humans) is what you come across every day on the Internet. I believe you already understand what it is. What I want to highlight is what GeeTest CAPTCHA is capable of.
1. It can of course detect malicious activities on websites and apps.
As a 9 year old player in the cybersecurity industry, GeeTest is well aware of what security means for online businesses. It is not necessary to illustrate the efforts that GeeTest has devoted to the security capability of its product. Here are those who trust GeeTest for their security.
2. It increases the cost of fraudsters.
GeeTest CAPTCHA has AI models that can learn from doing. When bad actors find new ways to attack, GeeTest Adaptive CAPTCHA evolves too. This is why it is called “adaptive”.
3. Bonus! It provides a risk analysis to decision makers.
We know that not every responsible business has just one protection for their website or app. GeeTest Adaptive CAPTCHA cooperates with your existing security systems. It provides data and analysis for your risk management system to make the most accurate risk judgment for everyone, but only you know the best for your business.
Make sure you are fully prepared for what will happen during the winter break 2021. Protect both your customers and your business, making peak season success a reality.
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