If you are an e-commerce owner, then the term “payment fraud” must be well known to you. The main reason for its popularity is the huge cost burden caused by these frauds to your business, not to mention the degradation of your credibility as well as client’s trust.
Generally, a payment fraud can be understood as an illegal or false transaction done over the Internet. Since all the e-commerce businesses sell products online, their payment is done online as well and hence there is maximum chance of payment frauds for them. It can be said that such frauds are unstoppable, however if an e-commerce owner uses an efficacious anti-fraud protection in its website / system, then the frauds can be avoided.
Cyber thieves are on constant look out for even the smallest patch or glitch in the online system (website, payment gateways etc.). Through these glitches or patches, they can steal the private information. Various ways of doing so are directly contacting the owners of credit cards via SMS or email (known as phishing frauds); redirecting the transaction to a fraudulent website; or even calling them by pretending the customer care executive of the concerned e-commerce website.
Common Scenarios of Payment Frauds:
Credit Card Frauds
Disagreement in accepting product delivery
1. Credit Card Frauds
Ranked among the common crimes related to online payments, the easiest way to misuse is that fraudster steals the card and using it, they shop online for various products. In this scenario, the affected party (consumer) can get that specific amount back after some efforts, but the merchant loses that amount as well as the product.
2. Disagreement in accepting product delivery
In this scenario, fraudsters places online order for products then merchants sends the order to fraudsters, who then put forwards the claim that he/she did not collected the product. In this case, the truth lies somewhere between the rock and a hard place, hence is hard to determine.
3. Fake Returns
In this case, the customer puts in effort to win over the merchant over the statement that the ordered items are sent back to him and money should be refunded to him. However, those items never reach the merchant. In its spinoff setting, customer can claim the presence more than the actual number of items returned to merchant and hence claim a complete refund.
Through this information, merchants should understand that although “client is king” but client is not always honest and truthful. Therefore, they should implement suitable measures and policies to counter the aforementioned payment frauds.