Online Fraud Prevention Tips for 2024
Online fraud prevention is a shared responsibility between shoppers who can recognize signs of scams and e-commerce platforms that need robust security solutions.
During an average year, worldwide e-commerce businesses lose $48 billion to online fraud.
That means their platforms, online stores, or entire businesses are up against the rising number of highly technical and social engineering threats. Therefore, it’s just a matter of when an e-commerce business will suffer from a security incident.
What are some online fraud prevention tactics for businesses to reduce the financial and reputational damage of rising cyber threats?
Let’s start with what you can do as an average buyer when shopping online.
Whether you’re shopping for holiday gifts or selling products online, here are some of the common types of fraud to look out for. We also share what you can do to protect yourself from common scams.
Fraud Prevention Tips For Online Shoppers
While shopping online, you’re most vulnerable to versatile phishing scams. They trick victims into revealing sensitive data such as addresses, banking information, and physical addresses.
Infected links can be placed in phishing emails or SMS messages. People open them if they think they’re legitimate deals from trusted online shops or delivery confirmations.
For example, you might get fraudulent promotional emails that imitate well-known webshops asking you to click on a link to a spoofed site designed to steal your data.
Then, there are fraudulent websites that don’t target you specifically. Bad actors can set up seemingly legitimate websites and wait for the shoppers to visit them. They’re made to steal your data or trick you into revealing your sensitive information.
As a consumer, 50% of the online fraud prevention you can do on your end is recognizing such sites.
Recognizing Scam Web Shops
Some signs that a website might be a scam are that it:
- Sells everything and anything
- Features poor spelling and grammar
- Has been here since yesterday
- Offers deals that are too good to be true (e.g. significantly lower prices compared to other merchants)
- Has only 5 stars and overly enthusiastic product reviews
Also, avoid clicking on the first sponsored website that comes up in a Google search engine search. Cybercriminals can buy that place and use it to promote a spoofed version of the website buyers trust.
After you open such a phishing site, it can either install a malicious program on your device or a hacker will steal your personal data if you complete the purchase/log into the site.
There are resources where you can confirm that the website you plan to use for online shopping is legitimate. If you suspect that the site might not be trustworthy, do a quick Google search to see if it’s a scam.
Online Fraud Prevention For E-Commerce Businesses
Types of scams and fraudulent activities targeted at e-commerce shift and change. Shopping websites are susceptible to versatile types of online hacking — both highly technical and those exploiting humans who work within e-commerce spaces.
According to Statista, there was a surge of Fraud as service schemes in 2022. What that means is that cyber criminals provide illegal activities for their clients.
Other prevalent types of online fraud today include bot activity, phishing via customer service, and abuse of versatile policies that online businesses have in place.
What other threats should e-commerce companies pay attention to in 2024?
Account takeovers, triangulation fraud, and AI-powered threats.
Many e-commerce websites also require their customers to log in to get additional discounts or to track their shipments. With that, they gather a lot of customer data that can be exposed in a potential data breach.
Preventing E-Commerce Cyber Crime
To prevent financial and reputational damage to e-commerce businesses, it’s important to establish preventive measures against versatile hacking types — have layered security that consists of multiple security controls.
Many of these scams target either your employees or consumers. Therefore, training that raises awareness can help you avoid a lot of fraudulent behavior from going too far.
However, as an online shopper or owner of a more complex e-commerce platform, you need more from security — from safer payment systems to thorough security management.
To prevent online scams on your webshop, introduce a cybersecurity solution that is capable of detecting malicious bot activity early.
In case of fraud, the e-commerce platform is the one responsible and will have to repay the customer.
The longer you wait before mitigating the threat and the longer it takes for you to uncover fraudulent behavior within the infrastructure, the higher the overall expenses.
Today, most business e-commerce spaces rely on automated solutions. They run in the background 24/7 and block common types of fraud and hacking that target such organizations.
A Shared Responsibility
Most people think about online fraud, shopper scams, and identity theft after it already happens. However, that is the point when it’s already too late. The most you can do is to report the crime and reduce the damage.
Once the scammer obtains sensitive data or gets access to your funds, they create damage that’s impossible to rewind.
The data might already be out there, sold on hacking forums where it can be further used for identity theft. It is often used repeatedly, before being discovered.
Also, after a person is a victim of fraud, they suffer irreversible psychological consequences — even if they do recover what was stolen from their bank accounts.
What can you do to prevent hacking and fraud?
Online fraud affects everyone involved — from shop owners to online shoppers. While both are responsible for keeping an eye on signs of common fraudulent behavior and scams, businesses are the ones that bear the most responsibility here.
On an individual level, consumers can protect themselves from scams by avoiding visiting websites that are not trustworthy and restraining themselves from clicking any links from unknown senders in emails and SMS messages.
E-commerce platforms, on the other hand, need more thorough online fraud prevention plans, more layers of solutions, and continual management of security to uncover fraudulent activity on time.
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