Numerous fraud variants in the online trade
The financial damage caused by Internet crime amounted to 16.4 billion euros in Germany alone in 2012, according to a study by the IT security company Symantec Deutschland. And increasingly often, these fraud attempts are also made by online shops: goods are ordered, but not paid, fictitious or incorrect customer data are entered, ordered clothes are worn and then returned or used to pay stolen credit cards. The fact that the fraudsters prefer certain online shops or target groups, the experience values so far. Rather, online stores of all industries and any size are affected. Given the variety of fraud variants, it is not easy for individual online traders to recognize patterns, Targeted against the fraudsters. Despite these quite real dangers, according to the dealer’s survey, around 85 percent of online retailers surveyed do not yet use fraud prevention measures. And about 60 percent have not even dealt with fraud detection.
Fraud Prevention: How to identify fraudsters?
In addition, the study showed that those online retailers who are devoted to this issue would not use automated fraud prevention procedures, but rather rely on their long-term experience and decide upon them. In particular, customers who are always keen to avoid typing errors when entering the personal data, such as Teper instead of Peter or Patra instead of Petra, would be classified as suspicious. In addition, the ordering of primarily high-priced products, a lack of willingness to enter personal data such as the date of birth or the telephone number as well as a nonexistent purchase history would be interpreted as warnings by online merchants.
Create simple rules
In order to be able to identify fraudsters in the online shop, it is important that online retailers analyze the current order behavior of their customers. If, for example, the offered products are sold only within Germany, only German credit cards or those from the neighboring countries should be accepted. For IP addresses from distant states with a weak economic situation, locks should be set up in this case. Another rule should be the time of day when customers usually shop. If around 95 percent of the orders arrive during the day, it is advisable to set limits for night orders. It is also important that online merchants can adjust these rules and settings themselves within minutes. However, since most people are unlikely to be experts in the detection of fraud, it is usually advisable to revert to the expertise of professionals. A very hotly debated topic in the field of fraud prevention and control is the „Device Fingerprinting“ tool. This tool is used to identify the device from which the order is placed. Another way to evaluate transactions is to automate a customer’s existence on social networks such as Facebook. From which the order is placed. Another way to evaluate transactions is to automate a customer’s existence on social networks such as Facebook. From which the order is placed. Another way to evaluate transactions is to automate a customer’s existence on social networks such as Facebook.
Use fraud prevention services provided by payment service providers
Fraud prevention services are now offered by various companies. However, before online retailers avail themselves of such offers, the complexity of the products as well as the integration costs have to be put to the test. If online retailers have decided to use fraud prevention solutions , payment service providers such as Novalnet are the right contact. Access to the necessary data can be used to deceive fraudulent behavior and to analyze it in real time. In addition, Novalnet also offers individual options for fraud prevention, if an own fraud risk is identified for the own online shop.
Plausibility checks for credit card payments
In view of the fact that a large proportion of registered fraud attempts in online commerce are due to payment with the credit card, online merchants should place appropriate fraud prevention mod- ules for payment service providers. Such a module is the so-called „Luhn-Check“, in which a basic plausibility check of the credit card number is carried out. Such fraudsters can already be detected in the first step. For payments by direct debit, however, the „Bank Account Check“ is recommended. It is important in every case that the modules are individually tailored to the payment methods offered and the product range of the online shop. However, further professional aspects should be placed alongside these professional fraud prevention modules in order to minimize the risk of fraud. For example, an offer-wide maximum sum could be fixed for first-time buyers, which represents a further hurdle for fraudsters. In addition, risk-based payment methods, such as the purchase on account, should only be made available after a certain number of successful purchases.
How online merchants should react in fraud
Although the risk of fraud can not be completely eliminated, the number of successful fraud can be reduced to a minimum by means of individually coordinated risk management. But how should online retailers react if the extensive anti-fraud measures – such as a credit card theft or spoiled credit card data – can not be avoided and fraud can not be ruled out? For these cases, online retailers should have the ability to make use of a functional receivables management system. If the fraudster can be identified, or his fraudulent behavior can be traced back to an existing address, the ad should be reported immediately and the legal steps provided by our system initiated. Not only financial hardships will cause operators of online shops to have to deal with this problem over and over again. However, this worst-case scenario can be reduced to a few cases with appropriate fraud prevention.