There are lots of things to think about and address when you are running an ecommerce store. One of those things is fraud prevention. Unfortunately, cybercriminals use various methods to fraudulently access money or data, so you need to be aware of red flags and know what steps to take to avoid being a victim of ecommerce fraud.
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Common Types of Ecommerce Fraud
Ecommerce fraud happens in a variety of ways. One of the most common ones is criminals using stolen credit cards to buy items at ecommerce stores. Another common scam is typosquatting, in which a criminal registers a domain name that closely matches the commonly mistyped version of a legitimate ecommerce store. The criminal then redirects the domain name to the vendor’s site with an affiliate link. Other common types of ecommerce fraud include chargeback fraud, interception fraud, triangulation fraud, and phishing.
How to Prevent Ecommerce Fraud
You should read up on the common fraudulent activities that cybercriminals use so that you can easily recognize them and not become a victim. But you should also take preventative measures to reduce the risk of fraud in your ecommerce store from happening in the first place. Here are some of the best ways you can do that.
Get Identity Theft Protection
Identity theft protection monitors your online accounts and data. While it cannot actually prevent someone from stealing your information, it will warn you as soon as there are signs that there is fraudulent activity. You can then take quick action. There are lots of different types of identity theft protection software, so make sure you compare different ones to find the best solution for your needs.
Use HTTPS
HTTPS is a more secure version of HTTP; the protocol that is used to send data between your online store and a customer’s browser. By using HTTPS, the sensitive data, such as the customer’s name, address, and credit card number, is encrypted. Therefore, cybercriminals are unable to access the information. To get HTTPS, buy an SSL certificate for your ecommerce site.
Use an Address Verification Service
Most issuing banks and credit card processors offer an Address Verification Service in order to detect suspicious credit card transactions and prevent fraud in real-time. Address Verification Service checks the billing address that has been submitted with the address on file for the cardholder to make sure the addresses match. When the addresses do not match, the transaction will be declined and flagged for investigation.
Require CVV for Every Transaction
Card Verification Value, more commonly known as CVV, refers to the three or four digits on the back of debit and credit cards that act as a security code. By simply ensuring all customers provide their CVV codes for every transaction, you can reduce the chance of fraud.
Do Not Store Unnecessary Customer Data
If your customer data is hacked, it could ruin your business. So, a good additional level of protection is to simply not store sensitive customer information. After all, hackers cannot steal what you do not have. Collect the data that is necessary for completing transactions only.
Perform Regular Site Security Audits
If you want to be sure that your ecommerce site is always secure, you need to perform site security audits on a regular basis. That includes making sure you back up often enough, have a current and working SSL certificate, have up-to-date plugins and shopping cart software, are scanning for malware, are encrypting communications between your store and your suppliers and customers, and are using strong passwords for your admin accounts.
