Any kind of illegal transactions
committed by cyber criminals for their financial gains can be termed as online
payment fraud.In this fraud, the
victim is deprived of personal property, funds and sensitive information
through the internet. Because of the ease of operation, business through
internet has increased significantly. The scammers find new methods and
technologies for preying on the funds of others and thus it is pertinent to
know how the online payment fraud can be avoided.
The online Payment Fraud has the
following three characteristics
- Loss, pilferage or theft of merchandise
- Unauthorized or fraudulent financial transactions
- Bounced checks and fraudulent solicitation for refund of a particular amount
Types of Frauds
- Phishing: The main objective of phishing is to ‘fish’ out the personal information such as credit card number and particulars, bank account or credentials for logging in. The scammers will pretend to be trustworthy and reliable and the victim is urged upon to pass on the information, believing that he is giving the information to right source. The scammers make use of the information for their illegitimate personal financial gains.
- Identity Theft: Scammers enter into the firewalls, through old security systems. Alternatively, they hijack the login credentials through the public Wi-Fi system. The scammers steal personal information and use it under false pretense.
- Page Jacking:The scammers hijack part of your ecommerce site by rerouting the traffic and directing visitors to a different website which may contain malicious materials used by the hackers, infiltrating the security system of a network.
- Advance Fee through Wired Transfer: Credit Card users and ecommerce store owners are targeted and asked to pay money in advance in consideration of loan at lower rate of interest, or a credit card or money at a later date.
- Merchant Identity Fraud: In this kind of online payment fraud, the scammers set up a merchant account on behalf of a virtual legitimate business and charge stolen credit cards. The scammers then disappear before the fraudulent payment is discovered by the actual card holders and make reverse transactions. The facilitator of payment becomes liable for the loss for the additional fees linked with the charge-backs of credit card.
Modus Operandi of the Fraud
The scammers pose as accredited
representative, obtain the sensitive information from credit card owners and
make use of the following means of interaction for stealing personal data; such
as phone calls, emails, instant messaging, and online auctions and by texting
malwares to smart phones.
How to Avoid Frauds?
- Encrypt transactions and emails
- Run security checks with anti-virus software
- Be aware of the latest trends of frauds
- Partnering with a verified payment processor
- Change the login credentials a and tokens are regularly changed
- Pursue a policy with regard to accessing to confidential information
- Prior to making any purchase, ask customers for logging to an individual account.
If you are running an ecommerce
store, you as well as your customer can fall victim to fraud. Therefore, adopt
suitable measures to prevent online payment fraud and for providing adequate
protection to your reputation.
