Payment Fraud: How to Prevent Online Fraud

Online frauds are unavoidable these days and its existence has caused a lot of trust issues, in which, even the genuine buyer would look like a villain to the seller.

Impacts can be both monetary as well as non-monetary. The chargebacks, refunds and returns would result in financial losses to the business.

There are non-monetary losses like the reputation getting affected before the partners, investors and new clients/customers after once having the security breach on the system and spreading of the news about the same.

Strategies for Fraud Prevention in Your Business

As previously discussed not only the customers but also the businesses are at risk of online frauds and become a victim of the same. So it is very necessary for them to take a few steps for fraud management and to prevent fraud committed through online.

The businesses dealing with such personal information of the customers or are into the activities that are supposedly in the blacklist for the prospective frauds need to be very cautious. They should put around the safeguard all over the corporate around all departments. Yes, such companies have strict compliance for the IT department in order to protect the data.

• Security Measures

The Payment Card Industry Data Security Standard (PCI DSS) compliance is the highest level of assessment standard design specially to provide a secure environment for online credit/debit card payments. If the online shopping website or any other website makes it necessary to receive sensitive and personal information then it should be made PCI DSS Compliant.

Secure Sockets Layer (SSL) will encrypt the link between the web server and browser, and it will ensure that all the data pass through webserver to browser remains private and untouched.

• Don’t let them get into your gadget

As discussed earlier, the computers, smartphones, etc are prone to get hacked. To avoid such cyber attacks protect them with the install antivirus software. Also, update them regularly to make sure the computers are further safe from viruses.

There are other softwares like Anti-spam software to make sure there no spam or junk emails a safeguard against bummer of phishing, Firewalls are used to prevent the viruses and Anti-spyware as the name suggests helps prevention against the installation of the spyware that can access your computer, send pop-ups and redirect you to malicious websites.

E-commerce Fraud Prevention: How to avoid it?

The above two precautions are applicable for the eCommerce businesses as well, apart from them below are some other steps to avoid fraud:

• Use Address Verification with the help of the Pin Code of the address
• Make the security codes available at the back of the Card compulsory for the Card Payments
• Make some internal system or risk department tracing the buyer behaviour and keeping an eye for the unusual purchase
• Make it compulsory to have strong passwords.
• Making strict delivery rules to avoid Refund/Chargeback frauds. Like sign by the customer at the time of delivery or at the time of the returns the delivery man needs to follow a pre-decided strict procedure to check if the returned item is the same as purchase one
• Special Security steps like asking for ID cards on large orders
• May install the Address Verification Service (AVS) tools provided by credit card processors and issuing banks to sellers in order to detect suspicious credit card transactions and prevent credit card fraud. It can help to limit fraud and charge-backs. AVS works to verify that the address entered by the customer is the same as the one associated with the cardholder’s credit card account. It is a MasterCard service designed to stop card-not-present (CNP) fraud; however, it is now widely used by many major credit card companies. During the checkout process, a customer enters their address, which is then compared to the address on file with the issuing bank. Once the addresses are compared, the issuing bank returns an AVS code to the merchant. Merchants can use this AVS code as a guide to determine how to proceed with the transaction.
• Avoiding Card-Not-Present Frauds includes verifying that the address provided by the customer at the time of purchase matches the billing address on file with the credit card company, checking the validity of three-digit CVV security codes and prohibiting merchants from storing these codes. However, if the criminal has stolen these details, the fraudulent transaction may appear legitimate. However, they cannot easily detect a type of card-not-present fraud called friendly fraud.

So, making all these a necessity in your online business can help you to beware and probably safe from the scammers.

Tips for Online Fraud Protection and Prevention for Individuals

The customers who are scammed need to take care of the following aspects to prevent fraud in their lives:

• Do not provide any sensitive or personal information to anyone. All genuine financial institutions will have the norms for never asking their customers for any sensitive information. So whatever amount of urgency is created, do not provide the information. To calm yourself you may try to search for the government or private institute, bank, charity etc, whatever they were claiming to be. In many cases, you would spot them because such imposters would always try to be someplace which is already famous to gain your confidence. Then contact them on the available official number and ask them if they have been sending such emails. You will get your answer!
• Believe in the online reviews available. Search for the website, seller or service provider to whom you are going to buy from. There are online customer forums, many a time there are available complaints or grievances available from the buyers who are scammed too from the same person you are being approached by.
• Credit Cards are the safest way to make the payment. Under credit card terms and conditions, the credit card issuer will not hold the cardholder liable for any fraudulent charges, whether through card-present or card-not-present fraud.
• It would mostly be too hard to believe. Big discounts, low prices, attractive offers, etc. So always stay away from them however attractive they are.
• Check the website security protocols and compliances before you enter your personal information like the letters at the beginning of the address bar at the top of the screen should change from “http” to “https”.
• Easy money or unusual offers like earn through work from home are usually the scams. You should never indulge in that. As no one would give so many advantages without anything being fishy.

All in all, always keep an eye on the types of frauds prevailing. With the advancement of technology and digitalisation, there is also the scope for getting defrauded increasing. Also, the possibility of getting scammed is more when the holiday season is around and when online shopping and payments are higher than normal.

Check out the news every day to know what is going on and learn from the others unfortunate experiences.