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The e-commerce landscape faces increasingly sophisticated fraud and cyber-attacks that exploit vulnerabilities within enterprises, causing significant damages to businesses. Shockingly, cybercriminals manage to steal a staggering 33 billion personal data records annually, resulting in approximately USD 6 trillion in damages.
Based on recent studies, four types of fraud have consistently posed significant challenges for merchants in the past year. These prevalent fraud attacks include phishing, card testing, profitable offers and social media announcements, and friendly fraud. These attacks affect approximately one-third of merchants worldwide. Notably, these fraud attacks are often interrelated, contributing to their prevalence. However, friendly fraud has shown a slight decline, impacting 32% of merchants in the latest survey compared to 39% in 2021.
Phishing involves unsolicited advertisements or threatening emails sent to a large number of recipients. To protect yourself, refrain from opening links or attachments in such emails and take necessary precautionary measures. Many online scams revolve around fraudulent purchase offers. To avoid falling victim to these traps, be vigilant for certain characteristics that may indicate a scam. If an offer exhibits any of these points, it is recommended to refrain from making a purchase.
Fraudsters employ card testing as a tactic to determine whether a stolen credit card is still functional. They often initiate a small, low-value purchase to avoid detection by the cardholder. Once the card’s validity is confirmed, they proceed to make more expensive purchases using the stolen card. Card testing ranks as the second most popular type of e-commerce fraud for all merchants, causing frustration for customers and subjecting businesses to additional fees and disputes.
Profitable offers and advertisements, such as cosmetics, clothing, or food supplements, often appear on social media without user request. These ads vanish immediately after ordering or payment, making it challenging to trace the seller, supplier, or even the terms and conditions.
Friendly fraud occurs when customers make a purchase through an e-commerce website but later file a chargeback with their bank. They illegitimately claim that the product wasn’t delivered, appeared different from what they ordered, or that they canceled the order shortly after placing it. Such chargeback fraud investigations account for 2.9% of enterprise brands’ e-commerce orders, with friendly fraud being responsible for 39% of global fraud attacks.
Fraud prevention is of paramount importance for SMEs and consumers alike. At the EU CBEC Forum 2023, we will discuss cybersecurity and various tools to safeguard cross-border e-commerce sectors from fraud. Stay informed and take proactive steps to protect yourself from fraudsters for a secure online shopping experience.