Watch Out For These Fraud Trends in 2017.
Fraud can cause your business more harm than you think. From lost customer trust to financial losses, fraudulent activities can shut down your business!
Some types of online fraud recur on a yearly basis. Identifying such fraudulent acts is important. Hard to detect are fraud patterns that exploit blind spots of eCommerce websites. Most fraud is more complex.
It is crucial to watch out for these fraud trends in 2017 as they could damage your business’ reputation for good.
More Fraudulent Bot Transactions
The number of fraudulent activities has been on the rise as electronic payment transactions have increased. The most common being the use of tools to generate credit card numbers. Fraudsters test randomly generated credit card numbers and Card Verification Values (CVV) at protected merchant sites until they find an effective credit card and CVV combination that works. Additionally, they test these CVVs against their valid credit cards. When they are able to find an effective combination, they commit fraud using bots, placing multiple orders in an instant.
It all happens so fast, that there is now ay to recover from the damage for the credit card owner and also for the business that accepted the fraudulent transactions. Today, this kind of automated fraud is quite common.
In-store pickup fraud
Online ordering with in-store pickup is not only convenient for customers and omni-channel retailers, but also for fraudsters. Click and collect is the growing norm nowadays, and fraudsters seem to make the most of such buy online and pick up in store opportunities. Not all retailers focus on fraud screening of online orders, which means fraudsters complete the order and pick up merchandise before the seller can discover the fraudulent activity. There are simple ways to modify and secure the pick-up process, without discouraging actual customers. Unfortunately, not all retailers seem to be paying attention to them.
Related: How to Reduce eCommerce Fraud Risk.
While customers are happy to receive orders the same day, it does encourage fraudulent activities. Faster shipping means more opportunities for successful fraud, as there are higher chances of criminals getting their hands on the merchandise and running away with it before any fraudulent activity is detected. This kind of fraud trend is expected to rise in 2017 as more and more retailers start to offer same-day shipping.
Post-EMV Online Fraud Blues
There has been a significant rise in fraudulent activities online ever since the EMV liability shift in October 2015, as fraudsters look for easier targets. As of now only 29% of retailers in the US accept EMV Chip cards at POS terminals. Fraud trends portray a rosy picture of such fraudulent acts as more and more retailers shift to EMV in compliance with card company rules.
Given the rising fraud trend, retailers need to brace themselves up with countermeasures against fraud patterns to reduce online fraud, without discouraging real customers. You will have to find a balance that works best for your industry.
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