New Year, New Fraud: The 5 Types of Fraud to Watch

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Re-shippers are fraudsters that use an intermediary to make their orders look less suspicious. As buying and selling online grew more popular, retailers quickly learned that international orders could be riskier than domestic ones. To avoid the pain of chargebacks or black market reselling, many retailers may make business rules to automatically ban any overseas orders.

In order to get around this barrier, fraudsters based abroad make purchases (usually with stolen credit card information) and use individuals or freight companies in the same country as the store to act as the shipping address for orders. Then the packages are forwarded along to their final destinations, where their contents may be sold on the black market. When scammers use a re-shipper, they're able to bypass basic static fraud detection rules.

The good news: It's a great time to be an online retailer. In fact, this year's Black Friday saw a record number of online shoppers. For the first time in history, online sales exceeded transactions in brick-and-mortar shops.

The not-so-good news? More fraudsters than ever are targeting online businesses. Credit card fraud attempts grew from 2014 to 2015, and thanks to the October EMV rollout that makes physical credit cards much harder to counterfeit, experts predict that more criminals will move online. When examining the numbers from other countries that implemented EMV cards, retailers saw exponential growth in online fraud in the following years, increasing anywhere from 30 to 60 percent.

So, what can merchants operating online do to prepare for the inevitable flood of shoppers, both good and bad? Knowing how to spot the suspicious shoppers is key. In this slideshow, Jason Tan, CEO and co-founder of Sift Science, and Emily Chin, market manager at Sift Science, have pulled together the most common types of fraud that you might encounter.


Related Topics : SharePoint, Web Video and Voice Conferencing, UK, MySpace, Intranets

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