Online businesses are easy targets for fraudsters or cybercriminals. Today’s advanced technology has given fraudsters a massive opportunity, especially since most people now prefer to shop online. Personal information can be easily accessed on the dark web. In fact, it’s also easier for fraudsters to cover up their activities and hide behind false details.
So, if you don’t want to be a victim of fraud, you should know how to keep your personal details safe by using legitimate websites only. For instance, if you’re interested in trading, make sure to visit scambrokersreviews.com to determine whether or not a platform is a scam.
If you’re running a business, here are the types of online fraud you should know:
One type of online fraud is called triangulation fraud, which happens when fraudsters set up a replica or fake website and entice consumers with cheap goods. Such fake websites may appear in the form of ads, or be sent to emails directing to the website for a phishing attempt.
Often, fraudsters will use the name of a known business. And when customers click the link, their personal details will be in danger. Getting hold of credit card information and using such details to make fraudulent purchases is known as triangulation fraud.
To protect your business from this type, you should remind your customers about your official stores or websites. In this way, they’ll know if the emails they receive are from your business.
Credit Card Fraud
This type of online fraud is the act of fraudsters using credit cards to obtain money from people. It’s also the most common online fraud that many businesses encounter. Basically, there are several kinds of credit card fraud, and these are:
- True Fraud: It’s when fraudsters use a stolen or lost credit card to complete transactions online. An example of true fraud is when fraudsters use a lost card before their cardholder finds it missing.
- Friendly Fraud: It’s when cardholders dispute transactions without realizing they authorized the purchase. It’s also an unintentional act of fraud as cardholders believe that they’re wrongfully charged.
Identity fraud is one of the most common types of online fraud often used by cybercriminals. It doesn’t involve stolen credit card details. It is because identity fraudsters will use names, user accounts, email accounts, addresses, or personal devices to make them seem like real customers. This may result in fraudulent purchases, traffic manipulation, and the creation of fake accounts.
In this online fraud, the culprits use stolen credit cards to make an overpayment on purpose. Then, they’ll contact the business to ask for a reimbursement. They’ll also ask to refund the excess amount and claim that their credit card can’t be accessed. So, they use an alternative method to receive money. It means the credit card’s original charge isn’t refunded, and the business will be responsible for the full amount.
Ways To Protect Your Business From Online Fraud
Online fraud is bad for your business and customers. It can be devastating as it may result in significant losses, regardless of how big or small your business is. Fortunately, there are ways to protect your business against online fraud, and these include the following:
Use Fraud Detection Solutions
One of the best ways to keep your business safe from many kinds of online frauds is to use an effective fraud detection solution. Typically, it’s a third-party solution specializing in determining red flag transactions and protecting businesses from credit card fraud.
Although it’s an extra expense to invest in fraud detection, it’s worth it as it’s helpful for all businesses. It can be valuable for small businesses that don’t have enough resources, time, or in-house teams to implement larger fraud solutions.
Be Vigilant During Peak Seasons
Peak seasons like holidays can be the most crucial months for businesses as more people purchase on online stores. During these times, you might be busy checking your inventory and orders. In this case, you should be very careful, particularly if you receive bulk orders from foreign customers. This kind of behavior is one of the ways fraudsters perform card testing fraud.
Make A Blacklist
Whether or not you have a fraud detection solution, you may notice that some of your customers have tested various credit cards with your online business. When you find such customers, include them on your blacklist.
Once you put some suspicious customers on a blacklist, you’ll ban them from purchasing on your website in the future. Although having a blacklist isn’t a complete solution, it’ll help you flag possible fraudulent transactions before they happen based on their previous behavior.
Conduct Social Engineering Training
‘Hardening’ your network system means setting up red flag alerts and firewalls around your hardware and software infrastructure. But the business is still susceptible to online malicious intent if your employees don’t know what to watch out for.
Train them to detect phishing emails and social engineering attempts. Social engineering comes in the form of communication addressed to workers within the business. It aims to emotionally manipulate them so they would release personal information like passwords, pins, and user names. Taking care of the network as well as the human side makes your entire enterprise truly hardened.
Online frauds can be stressful as they may cost businesses to get disrupted or lose a lot of money. So, as a business owner, it’s crucial to be aware of the types of online frauds and the ways to prevent them effectively. Once you implement prevention strategies, you’ll be able to reduce the risks of online fraud, and keep your business safe from fraudsters.
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