TFC’s Guide to Avoide E-Commerce Scams

TFC’s Guide to Avoide E-Commerce Scams

In today’s digital age, online shopping has become a convenient and popular way to purchase goods and services. However, this surge in e-commerce has also given rise to a new breed of scammers looking to exploit unsuspecting shoppers. In this blog, TFC guides all the brands in understanding and avoiding e-commerce scams to ensure your online selling experience remains safe and intactic.

1. Card Testing Fraud :

Description: Using automated bots or manual methods to test stolen credit card information by making small purchases on your website.

Prevention: Implementing security measures like CAPTCHA, velocity checks (to detect multiple failed payment attempts), and address verification (AVS) to detect and prevent card testing.

2. Account Upgrade / Phishing Scams :

Description: Sending fake notifications to users claiming their account needs an upgrade or verification, leading to phishing attempts or account compromise.

Prevention: Encourage users to verify account changes directly through your website or official communication channels. Educate users about recognizing and reporting phishing attempts.

3. Friendly Fraud (Chargeback Fraud) :

Description: Customers making legitimate purchases but later claim unauthorized charges, leading to chargebacks and loss of revenue for your business.

Prevention: Maintaining detailed records of transactions and communication with customers. Updating policies on website and ensuring to get back the defective product while delivering exchange, to update quality check and verify customer honesty for future orders.

4. OTP Verification :

Description: Delivering fake parcels on COD and getting OTP from customers for hacking and other fake purposes.

Prevention: Educating customers to receive OTP only when the delivery person along with the parcel is in front of them, avoid giving OTP on call or prior/ after the delivery.

5. OTP Re Verification :

Description: Delivering genuine product from the brand and verifying OTP once but the delivery guy scams afterwards by asking OTP Reverification which leads to unauthorised transactions from the bank or any other malpractice.

Prevention: Educating customers to receive OTP only when the delivery person along with the parcel is in front of them, avoid giving OTP on call or prior/ after the delivery.

6. Social Media Scam :

Description : Duplicity of your brand and asking money from customers by getting them to place orders and/ or winning a lucky draw.

Prevention : Clarifying on the site that these are our socials, any other ID or site with same name might be a fraud and keeping a regular check.

7. Identity Theft :

Description: Stealing personal information (e.g., names, addresses, credit card details) through phishing attacks or data breaches to make unauthorized purchases or open fraudulent accounts.

Prevention: Securing sensitive customer data with encryption and access controls.

8. Dropshipping Chargebacks :

Description: Dishonest dropshipping partners may fail to deliver orders or provide poor-quality products, leading to customer chargebacks and reputational damage.

Prevention: Vet dropshipping suppliers thoroughly and establish clear contractual terms regarding order fulfillment and product quality. Monitor customer feedback and address issues promptly. Photo Proof or Signature after delivery or OTP verification should be a must.

9. Account Harvesting :

Description: Scammers use automated bots or manual methods to harvest valid email addresses and passwords from your website's login or registration forms.

Prevention: Use CAPTCHA or reCAPTCHA to prevent automated account creation. Implement account lockout policies and monitor login attempts for suspicious activity.

10. Fake Reviews and Ratings :

Description: Competitors or malicious actors may post fake positive or negative reviews to manipulate your business's reputation and credibility.

Prevention: Monitoring review platforms and report suspicious reviews. Encouraging genuine customer feedback and address customer concerns promptly.

11. Refund Fraud :

Description: Exploiting refund policies by making fraudulent refund requests or returning counterfeit items in exchange for refunds.

Prevention: Implementing clear and consistent refund policies. Verify return items carefully and consider restocking fees for returned merchandise.

12. Account Creation and Account Takeover :

Description: Creation of fake accounts or hijacking of legitimate customer accounts to make unauthorized purchases or engage in fraudulent activities.

Prevention: Use of strong authentication methods (e.g., email verification, SMS verification) during account creation and periodically prompt users to update passwords.

13. Deepfake Scams :

Description: Using deepfake technology to create realistic audio or video content impersonating business owners or customer support representatives, leading to fraudulent activities.

Prevention: Educate customers about verifying identities through official channels. Implement multi-factor authentication for sensitive interactions and transactions.

14. SEO and Advertising Scams :

Description: Fraudulent SEO agencies or advertising services promise unrealistic results (e.g., top Google rankings, high click-through rates) but provide little or no value.

Prevention: Research and verify the credentials of SEO and advertising providers. Set clear expectations and monitor performance metrics to assess the effectiveness of campaigns. Work with businesses only with promised past results of brands, after confirming with a brand.

15. Gift Card and Promo Code Abuse :

Description: Scammers exploit gift card or promo code systems by using stolen codes or generating fake codes to redeem discounts or credit.

Prevention: Implementing fraud detection algorithms to identify unusual patterns in gift card or promo code usage. Limiting the number of codes issued per user and monitor usage analytics.

16. Inventory Manipulation :

Description: Exploiting vulnerabilities in inventory management systems to manipulate stock levels or pricing information, leading to incorrect orders or pricing discrepancies.

Prevention: Using automated alerts for sudden changes in stock levels or pricing.

17. Fake Order Scams :

Description: Placing large orders using stolen credit card information or fraudulent payment methods, aiming to receive products without paying.

• Prevention: Implementing fraud detection tools to flag suspicious orders based on payment discrepancies, shipping addresses, or order patterns. Verifying large or high risk orders manually.

18. Spear Phishing Campaigns :

Description: Targeted phishing campaigns against specific businesses or individuals within e-commerce organizations to obtain confidential information or access.

Prevention: Implementing email security measures (e.g., email filtering, sender authentication) to mitigate risks.

19. Artificial Intelligence (AI) Scams :

• Description: Using AI-powered tools to generate realistic fake reviews, product descriptions, or customer interactions to deceive online shoppers.

• Prevention: AI-powered fraud detection systems to identify and flag suspicious patterns in reviews or user interactions.

20. Fake Marketplace Listings :

Description: Fraudulent sellers list counterfeit or non-existent products on your marketplace, deceiving buyers and damaging your brand reputation.

Prevention: Implement seller verification processes and monitor product listings for suspicious activity. Provide mechanisms for buyers to report fraudulent listings.

21. Website Vulnerabilities and Data Breaches :

• Description: Hackers exploit vulnerabilities in your website's security to steal customer data (e.g., credit card information, personal details) or inject malicious scripts.

Prevention: Regularly updating software and plugins, use HTTPS encryption, and conduct security audits. Implement robust data protection measures and comply with PCI DSS standards.

Conclusion :

Safeguarding e-commerce sites against scams requires a multifaceted approach that encompasses technology, education, and proactive risk management. By following TFC's comprehensive guide, brands can bolster their defenses and create a secure online shopping environment for both merchants and consumers. Vigilance is the cornerstone of e-commerce security – stay alert, stay protected.