Is there anyone out there who doesn’t love online shopping? Now, you can purchase everything from your favorite shoes to your weekly groceries without ever having to leave the house. But while we seem to be growing lazier by the day, online fraudsters are only getting more active. In fact, studies show that e-commerce fraud is growing more rapidly than e-commerce sales, itself. According to a report by information services company, Experian, attacks in the U.S rose 30% in the year 2017. That’s two times faster than the growth rate of consumer sales in that same year.
There are a few explanations for this phenomenon. For one, the large-scale data breaches we have seen on the news all too much as of late. Exposed data has made personal information more accessible than ever before, making entry into users’ online accounts a breeze. Another cause? The smart phones we know and love. According to Adam Rogas, CEO of fraud prevention company, NS8, the Internet of Things (IoT) has created more points of entry and more opportunities for fraudsters to leverage this power. He adds, “With global ecommerce growing rapidly, particularly on mobile devices, merchants will need to embrace the use of third-party data and automated verification tools to score users and session data.”
E-Commerce Fraud Defined
E-commerce fraud, also known as purchase fraud occurs when a criminal carries out a transaction on a fraudulent basis, whether that involves a stolen or inauthentic credit card. Identity theft and synthetic identity fraud account for the majority of fraud losses. Identity theft is quite self-explanatory. Synthetic identity fraud, however, gets a little more complicated. Fraudsters are going as far as to create entirely new identities. Stringing together bits and pieces of information from a fictitious name to a minor’s social security number, criminals are creating fraudulent accounts and going unnoticed. When it comes down to it, e-commerce fraud affects everyone. Not only does it target other individuals’ identities, it leaves merchants without pay for those sales as well. This year, the cost to retailers has been approximated at $2.94 for each dollar of fraud loss. It will continue to go up if we fail to be proactive. “There will be an increased reliance on connecting pre-session data and recognizing fraud earlier in the process, rather than just verifying payments and personally identifiable information,” says Rogas.
The system of fraud prevention can get pretty tricky, especially when you consider the variety of evolving ways fraudsters are going about their business. Although, it is important to remember that you are not alone. With the right experts and a little bit of background knowledge, fraud prevention will become an intuitive and manageable aspect of your business. Here’s how to get started!
Create a Support Network
There are many companies out there that are struggling with the same security issues that you are. Some have identified new risks and are investing their time and resources into combating those issues. Whatever the risk factors may be, it is helpful to hear from peers and similar businesses to gain clarity about the subject. Attend meet up groups and begin crowd sourcing to connect with others and expand your own knowledge.
Do Your Homework
Of course, you will need to do your own research as well. Begin to educate yourself on some of the threats posed by fraud and what the consequences may be if you are not proactive. It is a constant learning process. “When starting and growing a small business, there are always going to be road bumps that present themselves. If something doesn’t go according to plan, quickly regroup and identify a better way to solve the problem the next time around,” says Rogas. To that note, businesses must continue to be vigilant, even more so than the ruthless criminals who continue to enhance their plan of attack.
Enlist an Expert
Fraud prevention requires a great deal of know-how and most businesses out there could use a little help. Luckily, companies like NS8 exist for the sole purpose of providing that expertise. By filtering out automated fraudsters from retargeting, NS8’s flagship software, NS8 Protect empowers businesses to defend themselves on multiple fronts. It also monitors site performance, alerting businesses when an issue may be negatively impacting them. “At NS8, we’re scoring everything from first click to finish, giving businesses data they need to make informed decisions. The composite scoring methodology that powers our EQ8 Score looks at users and sessions throughout their entire customer lifecycle, giving companies the most comprehensive view they can get of the visitors to their site.”
The costs of preventing fraud are far lower than the expenses of dealing with fraud after the fact. It’s time to get active; following these steps, you’ll be on the right path.