3 Common Ecommerce Frauds (and How to Avoid Them)
By 2018, the ecommerce industry will generate more than 2.5 trillion USD. Although more than half of online shoppers are millennials, the practice of online shopping is rapidly becoming a standard across all generations globally.
Only in Europe, more than 65% of internet users shopped online in 2015. However, this market could be even considered as underdeveloped when compared to the countries of China and USA. In China, the average annual revenue within this industry adds up to 562 billion USD. US follows with 349 billion USD of annual revenue.
In short – ecommerce has changed the world of trade for good. Although many of us appreciate the convenience of online purchasing, the question of security presents a constant threat for online shoppers. But let’s examine this matter more thoroughly.
More than 169 million records were exposed during the year 2015, due to cyber-attacks. According to PWC, that is a 38% increase when compared to the previous year. Over 77% of small businesses (with more than 50 employees), were victims of some type of a cyber-threat. Although all of these statistics should be alarming, the reality is that only 25% of businesses actually have a disaster plan for this particular type of threat.
So it’s not just the common consumer who is in danger of becoming a victim of a cyber-attack. All sorts of businesses are also endangered. Furthermore, if you believe that your small business isn’t big enough to become a target of hackers, think again – your business is one of their main targets.
The latest Symantec 2016 Security Report, noted that more than 43% of cyber-attacks are directed towards small business owners. Why? Because hackers are well aware of the above mentioned statistics. They know that only one in four SMBs are prepared for an attack, while the rest of them are up for the taking.
In case you yourself are running an Ecommerce business, getting informed about necessary security measures is the first step to protection. So, here are the top three common frauds that shouldn’t take you by surprise.
1. Identity theft / Credit card fraud
The most common type of a fraud is identity theft. While consumers are usually the ones who should be worried about the misuse of their credentials, small business owners are also affected. So, having an insurance for this type of scam is mandatory in the contemporary world of business. However, there are a few clues which can help you determine if you are doing business with a trickster. According to Scambusters report, scammers have easily recognizable patterns of behavior. Here are a few which can help you determine if your customer is, in fact, a scammer.
a) They shop during the night. In average, 9 out of 10 frauds happen after working hours.
b) Most scammers will never shop within their own country. So if you receive a suspicious order, make sure that you check the shipping address.
c) Identity thieves are well aware that their scam will be revealed sooner or later. This is why they will usually ask for express shipping.
d) If you received a high quantity order or an unusually expensive one, this is also a good indicator that something might be wrong.
e) Suspicious email address. While this one might be somewhat hard to spot, unusual email addresses should be checked when possible. So, if your “customer” is using an email service that you’ve never seen before, and their addresses are extremely generic or lack personal information – all chances are that you are dealing with a thief.
2. Email scams
More than 45% of emails are spam. We are all painfully aware of this fact. Statistically, 52% of companies find spam messages to be harmful to their business in some way. However, an actual email scam will probably arrive straight to your inbox, posing as a legitimate inquiry. When you receive an order that looks like a deal of a lifetime – all chances are that you are, in fact, being scammed. If there is a link somewhere in the body of that email, any sort of link, make sure not to click on it.
This tactic is called a phishing email. Phishing emails are among the most popular email scams that you can come across nowadays. In most cases, the offender will use an email address that is similar to the ones that you have in your directory, and they are getting scary good at mimicking writing styles and behaviors of your usual customers. The main purpose of this type of email is the acquisition of sensitive data through malware and ransomware.
Malware is a simple virus that has been around for ages now. Internet users are usually good at recognizing this type of threat, and if not – you can always back sensitive data and do regular virus scans on your PC. But the Ransomware is a whole another story. In this case, the victim is unable to access any data after they click through to the link presented in the body of the text. Usually, the perpetrator will take control of the target’s personal device, and contact the victim to demand a ransom. If the victim refuses to pay, all data gets deleted, or even worst – sold on the black market.
As we mentioned in the introduction part of this article, 75% of businesses simply don’t care enough about cyber threats. The main security issue with Ecommerce online stores is sometimes a mistake of the business owners who neglect their payment channels and methods, focusing only on generating revenue. If you fail to take an interest in the safety of your customers, know that you are exposing your business, along with your customers, to a direct danger. Be aware of the fact that hackers will always look for easy prey when they are targeting businesses. This is why it is extremely important to keep yourself updated about the latest cyber security threats and keep your website safe for use.
Make sure that your employees undergo a training, and that they are regularly updated about possible security threats. Negligence and third-party negligence is one of the most common causes of a breach. This makes the human factor your main vulnerability.
However, everything that can be done to prevent cyber threats from endangering your business shouldn’t be avoided. Including applying the latest safety measures to your checkout system. This is why Alternative Payments insist on secure transactions, helping both businesses and consumers to stay safe when making online purchases. With our payment solution, you are also getting a constant monitoring of unusual activities and every transaction is recorded and filed in a case of a fraud.
This should be a standard in the contemporary world of online business, and if you are running an Ecommerce store – let your customers know that you care.