If you run a business and sell your products online, you should be familiar with eCommerce fraud. When someone uses a nonexistent identity or stolen cards, or other ways to get profit from your company, it’s called e-commerce fraud. As you see, there are various methods scammers can use. You should apply the verified instruments to protect your business from this variation of fraud, and this article will help you to understand what is eCommerce fraud and how to fight against it.
Ecommerce Fraud Types
Any fraud that happens on the eCommerce platform is called e-commerce fraud. And here are its main types:
- Friendly fraud;
- Card testing fraud;
- Account takeover fraud;
- Refund fraud.
A friendly fraud occurs when the customer makes a purchase but then asks for money return in case they don’t like the service or just want to get a free product. Sometimes the payment lacks a descriptor, and the client files a chargeback only because of that.
Card testing fraud happens when the scammer gets access to the customer’s credit card details and uses them to make a purchase. Such a fraud method has become quite widespread nowadays.
If someone gains access to the client’s account, it’s called account takeover fraud. The personal information or account funds can be used to make a purchase. And the last eCommerce fraud method is refund fraud. It occurs when the scammer asks for a refund because of the accidental overpayment. All these situations cause losses to your business, so here are the methods to fight fraud.
Methods to Fight Fraud
Scam attempts may occur all the time, but the fraud protection reduces chargeback and refund cases several times.
Method 1: Set the higher account protection
The scammers can steal the customer information, so the two-step verification for logging in and making a payment will make a transaction safer. Also, send the messages to your clients every time someone logs on to the account. So, they will be able to inform if someone had stolen their data. Such a method allows you to protect the business from card testing or account takeover fraud.
Method 2: Make the service more clear
One of the reasons for the chargebacks is the lack of a payment description. You should add a descriptor, so people will understand the transaction purpose. Also, allow the customers to connect with the support team easily. It’ll help you to improve the service level and reduce the cases of friendly fraud.
Method 3: Use chargeback protection
Chargeback is one of the consequences of the e-commerce fraud. And its prevention instruments help you to monitor unusual activity and stop scammers before they make a purchase.
VMPI and Ethoca chargeback fraud protection products are the most popular nowadays. VMPI directs the customer’s disputes to the merchant instead of the bank. It allows you to solve the client’s problem before they ask for a chargeback. Ethoca mechanism saves your statistics because it sends the chargeback alert to the merchant not issuing bank. Both instruments are useful and should be chosen according to your needs.
Choose Strong Chargeback Protection
Different types of chargeback fraud have several methods to fight them. The best way to keep your transactions secure is to apply the VMPI or Ethoca chargeback protection. Also, you should improve your service quality to reduce the friendly chargebacks. Altogether, you can fight the fraud chargebacks quickly and with less effort.