BlogMarch 1, 2024

Combating eCommerce Fraud: Essential Strategies from NoFraud’s Anti-Fraud Squad

In the fast-paced world of eCommerce, where transactions fly as swiftly as the click of a button, the menace of fraud looms, threatening to undermine the integrity of online shops and erode customer trust. This is where the expertise of fraud analysts becomes invaluable. Enter the NoFraud Anti-Fraud Squad: a dedicated team of specialists armed with cutting-edge technology and deep industry knowledge. Their role is not just about detecting and preventing fraudulent activities; it’s about safeguarding the very foundation of your eCommerce business. Leveraging the NoFraud team’s expertise means fortifying your defenses, ensuring that every transaction is secure, and keeping your shop steps ahead of sophisticated fraudsters. This blog will explore how the NoFraud Anti-Fraud Squad can transform your approach to eCommerce fraud prevention, turning potential vulnerabilities into strengths and fostering an environment where genuine customers can shop with confidence.

Keep Thorough Records to Win More Chargeback Disputes

Kaishea Jones’ favorite part about being an Anti-Fraud Squad member is the thorough investigations she gets to conduct on behalf of merchants. “I like looking into transactions to determine if we should pass or fail verification of an order, and also protecting merchants from receiving a chargeback.”

Kaishea emphasizes the significance of keeping thorough records of every transaction, “Purchase date, product description, email conversations, invoice, text messages and other details could be helpful for a merchant during a chargeback dispute.” Sometimes fraudsters will try to change up information from an older, established order using a new email. Fraudsters try to be crafty, but keeping good records can help merchants win more chargeback disputes. 

To further bolster security, Kaishea recommends the adoption of two-factor authentication (2FA) for all transactions, a practice supported by data from Google indicating that 2FA can prevent up to 99.9% of automated attacks. This security measure adds an essential layer of protection, significantly reducing the risk of fraudulent purchases and associated chargebacks.

Domain and Shipping Location Mismatches Are a Red Flag

Ibtissam El Ansari is deeply passionate about her work in eCommerce fraud prevention, driven by the opportunity to “contribute to positive change and make a meaningful impact” on brands. This commitment is crucial in the fight against increasingly sophisticated fraud schemes.

Ibtissam has noticed a prevalent method employed by fraudsters that involves the misuse of school domains to ship items to random locations while manipulating billing and shipping addresses to appear identical. This tactic can complicate the detection process, as transactions may superficially seem legitimate. 

To keep your shop safe, Ibtissam highlights the importance of implementing 2FA for business accounts. The rising threat from external actors, who were responsible for 83% of data breaches last year underscores the importance of security measures like 2FA. For merchants, 2FA or Multi-Factor Authentication (MFA) plays a pivotal role in preventing unauthorized access and minimizes the risk of breaches. As cyber threats continue to evolve, the implementation of 2FA remains a key defense mechanism for online businesses aiming to protect their assets and customer data.

Run Comprehensive Background Checks

Taylor Johnson loves working with merchants to alleviate pressure by tackling the intricate challenges of eCommerce fraud prevention. Her dedication is underscored by the significant impact and value that NoFraud provides to growing businesses. Studies show that for every dollar lost to fraud, retailers lose $3.60 in costs that includes the cost of managing fraudulent transactions, highlighting its increasing complexity.

Taylor takes pride in being diligent when it comes to investigating the cases she oversees. A notable case she worked on involved an LLC linked to a registered agent who was under investigation for a $1 billion fraud case by the Securities and Exchange Commission (SEC). Discovering this connection was pivotal in her fraud prevention strategy, serving as a critical alert for similar fraudulent activities. 

In addition to running thorough background checks, Taylor also advises against package rerouting and warns merchants that fraudsters may contact customer service or carriers to redirect deliveries from the legitimate cardholder’s address to their own. These calls may seem like they’re coming from legitimate customers, but due diligence is always necessary when it comes to vetting good customers from deceitful fraudsters. 

Set Alerts for Copycat Websites

Jamie McKeon says the most rewarding aspect of helping brands combat fraud is the opportunity to safeguard the culmination of someone’s hard work and dedication. Developing a brand from the ground up is a monumental task, and she is passionate about helping companies protect their brand integrity and their customer base.

Jamie has noticed a spike in triangulation fraud, which not only impacts merchants but also ensnares unsuspecting shoppers. This scam involves shoppers purchasing items from third-party platforms, such as Amazon or eBay, or eCommerce sites in search of better deals, only to have their personal information compromised and be charged for non-existent products.

Unfortunately, Jamie has noticed an increase in fraudsters cloning entire websites, offering goods at significantly reduced prices to lure customers. This deceptive practice often results in consumers reaching out to the genuine merchants for updates on orders that were never actually placed, leading to compromised financial information without any real transaction. She says the adage “if it seems too good to be true, it usually is” aptly applies here. Jamie advises on the importance of adopting a robust eCommerce fraud prevention solution like NoFraud, which significantly reduces the time businesses spend on screening orders, allowing them to refocus efforts on product enhancement and optimization. She says the Anti-Fraud Squad “strives to verify as many legitimate shoppers as possible while blocking out fraudsters,” so merchants can keep more of their hard-earned revenue.

Don’t Skimp on Verifying All Transaction Details

Anthea Hansen shares her passion for aiding brands in their fight against fraud, particularly highlighting the significance of improving approval rates for online eCommerce transactions. Her satisfaction stems from the ability to validate orders that might initially appear risky to AI systems, thereby helping brands retain higher profits and more customers. The joy of ensuring both shoppers and businesses are delighted is a key motivator in her work.

Anthea points out a notable eCommerce fraud trend: the challenge of dealing with purchases made with foreign cards and credentials that don’t match the buyer’s country of residence or location details. These discrepancies often indicate fraudulent activity, underscoring the importance of vigilance in order verification.

Her advice to eCommerce shops is to invest in personnel, whether in customer service or data analysis, who are dedicated to scrutinizing transaction details and authenticating new customers. “Skimping on this can be more detrimental (and costly!) to a business than just employing additional help,” Andrea emphasizes.

Be Wary of Call Bombing

Irina Vayner shares her enthusiasm for tackling fraud, especially when it involves orders that appear highly suspect at first glance. The challenge of assembling disparate pieces of information using various databases to validate an order gives her immense satisfaction.

Recently, Irina has observed a spike in card testing — a tactic where fraudsters experiment with stolen credit card numbers on websites to confirm their validity. These fraudsters cleverly match the correct billing details of the cardholder but use arbitrary emails and shipping addresses to attempt to pass off their transactions as legitimate.

“It’s always interesting to see the different ways fraudsters will try to manipulate information to make orders appear legitimate,” shares Irina. She advises merchants to be wary of shoppers who make repeated calls attempting to confirm an order’s legitimacy. Despite their convincing demeanor over the phone, these interactions could be deceptive. Fraudsters are adept at social engineering, often saying exactly what is needed to win over the trust of customer service representatives, masking the illegitimacy of their orders.

Beware of Sophisticated Mule Scams

Jeremy Kumar loves helping merchants approve high-risk orders so they can keep more of their well-deserved earnings. He says, “Nothing is more satisfying than using all of our resources to find bits of information that enable us to verify orders that would ultimately otherwise be canceled.” 

Jeremy has noticed a growing sophistication to fraudsters’ tactics. Recently, he’s seen multiple cases involving complex mule fraud schemes. This usually involves fraudsters targeting vulnerable members of the community and engaging with them through fictitious friendships, romance, or employment. They’ll take the time to build relationships and then capitalize on the unsuspecting victim by registering cards in their names, and asking them to receive and forward packages. Jeremy shares, “It is awful to see how low fraudsters will stoop but it is always satisfying to play a part in limiting their success.”

A significant year-on-year increase in money mule activity has been reported, particularly among younger individuals and a notable rise among middle-aged groups as well. The National Fraud Database, a comprehensive database of fraud risk and intelligence in the U.K., reported a 34% increase in the number of accounts belonging to individuals aged 40–60 years old that show signs of money mule activity since 2017. This data underscores a shift in criminal strategies, with an increasing focus on recruiting middle-aged individuals and business owners to launder money, potentially due to the larger transactions typically made by this age group being less likely to appear suspicious.

To keep your shop safe, Jeremy recommends that merchants work with their shipping carriers to prevent any package rerouting. Fraudsters love to place orders using the cardholder’s address as the shipping address, then divert the package to themselves once shipped. Once reroutes are prevented, fraudsters will typically move on quickly.

Creating a Safer Marketplace: Harnessing NoFraud’s Expertise to Combat eCommerce Fraud

As we draw this exploration of the NoFraud Anti-Fraud Squad’s frontline insights to a close, it’s clear that the battle against eCommerce fraud is both complex and dynamic. The dedication and expertise of fraud fighters like Jeremy, Kaishea, Ibtissam, Taylor, Jamie, Anthea, and Irina illuminate the path to a safer online marketplace. Their shared wisdom — from identifying sophisticated mule scams to advocating for two-factor authentication and the critical need for comprehensive background checks — underscores a common theme: vigilance and innovation are key to outmaneuvering fraudsters. By implementing the strategies and tips shared by NoFraud’s Anti-Fraud Squad, merchants can protect their businesses from the financial and reputational damage caused by fraud and enhance the shopping experience for genuine customers. 

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