For many, eCommerce is the way to shop these days. There are so many people who have started buying products such as gadgets or clothes exclusively online. Of course, being able to get everything you want right at your doorstep with only a few clicks is very convenient. However, you should never stop being cautious when you buy products online as you are using your sensitive personal and banking information, which might make you subject to fraud or data theft. Here are ten of the most common eCommerce scams and a few tips on how to avoid them.

1. Phishing Emails

More than 30% of malicious attacks carried out online involve email phishing. This is one of the oldest internet scams, but it seems to be here to stay. Phishing emails are still making victims because scammers are becoming more and more cunning and tech-savvy. They manage to craft attractive emails that look 100% authentic as if they were sent from a real company that’s selling products online.  

There are many variations of email phishing scams. Some of these emails that are allegedly sent by famous online stores look like order confirmations. The ‘company’ is saying there’s a surprise or gift order waiting for you, or it simply sends a confirmation for an order you haven’t made. To get the products, you are asked to provide your personal information, and this is actually the goal of the scammers, to acquire personal data they can later use for fraud or impersonation.

2. Triangulation eCommerce Fraud

These frauds take a bit more effort buts con artists manage to make them worth it. Triangulation fraud involves three parties – an eCommerce website, the victim, and the scammer. The latter builds a website where they advertise products at incredibly low prices. Naturally, people are lured in by those tempting offers. They start creating accounts on the website to be able to purchase the products. Obviously, by doing this, they offer scammers their bank account number and personal data and this is all scammers need in order to use that information to make the respective purchases using clients’ bank accounts from a legit business.

As a general rule, to avoid this scam, only shop online from reputable eCommerce websites. 

3. Account Takeover

There are different ways in which fraudsters can take over a user’s account. For example, they can send an email that seems to come from a famous eCommerce website. Once the user clicks on a link included in the body of that email, they unknowingly download a piece of malware software. This program manages to hack the account the person uses to access that eCommerce website and get their credentials. Equipped with a password and username, the scammer can buy whatever they want to from that website.

4. Card Testing

This is one of the oldest scams that started to proliferate as more and more businesses began selling their products online. This scheme aims to defraud eCommerce websites. Scammers who rely on this tactic test various platforms by making small purchases using bots that experiment with different card numbers.

After they see that a card number is valid, they can further use it to make other, usually more expensive purchases.

5. Refund Frauds

These are other old tricks that are hard to spot until it is too late and that target online stores. What fraudsters do in this case is that they make a purchase using a stolen credit card. Afterward, they are asking for reimbursement as they claim they’ve made an accidental overpayment. The shop will want to proceed with the reimbursement and find out that the client’s request is to send the money to a different account as the previous card was closed. If you are running a business that sells products online. Watch out for these requests.

6. Interception Frauds

Interception fraud is another common eCommerce fraud and to be able to pull it, fraudsters typically use stolen cards. They use the billing and shipping addresses linked to stolen cards to buy products from an online shop. After placing the order, they use different strategies to track it and make sure the goods finally end up in their hands.

One tactic is to get in touch with the customer support department and ask them to change the address where the order will be shipped.

This ensures fraudsters get hold of the products while the payment is made by the person whose card details they’ve stolen. Another method is to get in touch with the shipping company and ask them to reroute the package to their address.

7. Friendly Frauds

These are also known as chargeback frauds. This type of fraud is carried out in the following way: a client buys an item from an online store and afterward asks the payment processor for a chargeback saying that their transaction was invalid. They also tell their payment processor that they’ve returned the products to the merchant, but they were never reimbursed. Another strategy is to claim that the order was canceled (hence they deserve a refund), but they still got the item. Upon their request, the bank returns the transaction value. However, the retailer still has to make the respective payment to the bank.

These frauds are often overlooked because they get lost in the multitude of claims related to invalid transactions, the majority of which are real. This is also why they are called ‘friendly’ frauds – because many times the individuals who make such claims are actually honest. The purpose of friendly frauds is to enable scammers to get products for free or get reimbursed for payments they’ve never made in the first place. For example, fraudsters purchase different products from online stores and receive them. However, they contact the respective shop saying the order was never delivered to their address and ask for a new package to be shipped.

Online stores can avoid such fraud attempts by using chargeback management software tools that can help monitor transactions to reduce fraud loss and handle client disputes.

8. Clean Fraud

Clean fraud is similar to friendly frauds and other types of eCommerce frauds listed in this article as it also involves using stolen credit cards. However, those who manage to carry out this type of fraud are more tech-savvy as they manage to circumvent software detention functions that aim to spot fraudulent activities. Before they can commit this type of fraud, fraudsters need to test the cards to make sure they are working. This typically involves making small test purchases on different websites.

Then, fraudsters need to know how the detection systems used by the eCommerce platform they’re trying to place an order on works. Moreover, they also need sufficient information on the owner of the credit card. This information allows them to get past the fraud detection systems as they have sufficient proof to complete the necessary verification and payment process.

9. Affiliate Fraud

Affiliate marketing used to be a buzzword a few years ago and many people have managed to make nice profits relying on it. In short, this method involves promoting certain products or services on your website.

For example, a travel blog can contain different articles that include various links to travel agencies, hotels, tour operators, or different companies that provide services in this industry. Once a reader clicks on a link and signs up on a website or purchases a product or service from one of those third parties, the blog’s owner receives a commission.

However, tech-savvy fraudsters can get those commissions even without actually ensuring that somebody clicked on a link. They can make this happen either by manipulating web traffic or by creating fake sign-ups. It’s possible to do this either manually if you create multiple fake accounts and sign up on different websites or automatically.

According to fraud experts, this type of fraud is one of the costliest threats for eCommerce platforms.

10. Merchant Fraud

This type of eCommerce fraud targets consumers and involves products offered at a cheaper price. Once people access the offers and purchase the products, they are immediately charged. However, the respective products are never shipped. Merchant fraud can also be encountered in wholesale.

10. Merchant Identity Fraud

Merchant identity fraud occurs when fraudsters or hackers manage to get hold of a company’s business identification information. With this information, they can create a merchant account on different platforms and start promoting and selling products. They charge customers who purchase products and direct the money into their accounts. Since no products are shipped, when the customers start making complaints, the eCommerce platform where the products were sold and, later on, the authorities contact the real company for explanations.

When online sales are growing, so are the potential threats related to online scams and cyberattacks. Be careful whenever you purchase products from a new website and remember the common scams listed above. Moreover, to stay safe, the best way is to make purchases online only from reputable platforms and, ideally, use a credit instead of a debit card.

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