The job of the anti-fraud system, as its name suggests, is to perform simple checks that greatly reduce a fraudster’s chances of success.
Generally, these systems operate by comparing the information provided by the user in their registration with that of the credit card used for the purchase.
And so, they determine whether the purchase request is genuine or the result of card theft, a cloned card, etc.
But it doesn’t stop there, exactly. Today, we’ll discuss anti-fraud systems in more detail, seeking to understand:
- What are the most common frauds in e-commerce?
- What are the areas of action of anti-fraud systems?
- What are the best anti-fraud tools available on the market?
- What happens with false positives?
Everything ready over there? Then let’s get started!
What Frauds Occur Most Often in E-commerce?
There are several types of e-commerce fraud, and new ones are emerging every day.
Frauds range from the simplest, such as stealing information on the dark web , to the most complicated, such as information triangulation scams.
And also those that happen within the family itself, c level contact list like a child using their parents’ card to buy a game, item or even a product.
The magic of the anti-fraud system for e-commerce is that it recognizes all these possibilities for fraud and evolves with them.
Therefore, an anti-fraud system will operate on two fronts: identifying the possibility of fraud is its biggest concern, followed by confirming the data so that the purchase is either approved or blocked.
But we’ll talk more about this in the next topic, a must-read for registered users of shenma where we’ll understand how the anti-fraud system really works.
For now, check out this list of the most common e-commerce scams:
Family Fraud — Very Common
The most common form of e-commerce fraud is family fraud, which does not involve criminals or professional fraudsters, but rather people from the same family.
This is the case we were talking about above. A child takes his parents’ card to buy something online.
In these cases, the anti-fraud system seeks to understand the transaction history on the card, and also requests confirmation information to validate the identity of the person making the purchase.
Even though it’s the most common fraud, it’s still the most difficult to stop. Since everything is within the family, it’s much harder to identify atypical behavior, and fraudsters have their own mechanisms to mislead identification.
Security questions, for example, are easily answered by fraudsters who are close to the victim. And it’s quite common for social engineering, which is impossible to prevent at the system level, to also be used.
Leaked Data (Clean Fraud) — Common
We live in a very complicated era when it comes to data security. Data is constantly being leaked, often without us even realizing it.
In fact, even more than that: without us knowing what data is being stolen.
In this type of fraud, scammers access databases of stolen information and use them to make purchases.
The level of complexity of these cases varies greatly. Those who have had their credit card information leaked are victims of cloned cards, for example.
While those who have information such as their CPF stolen end up suffering other types of scams, not related to e-commerce.
Anti-fraud systems act in these cases by checking the purchase history and blocking consecutive purchases of very high value, which are atypical for the victim.
It is worth noting that the burden of loss in the case of these scams is 100% on the e-commerce, if the merchandise has already been sent.
But there is still another branch of this scam:
Merchandise Interception — Uncommon
In this modality, the scammer makes the purchase using someone else’s data and asks for it to be sent to their home, usually.
However, after the purchase is completed, the scammer asks for a change of address, which is his home address.
This scam is not very common because it is not very effective. Not all e-commerce sites allow changes to the address after shipping, and this change in itself is already quite suspicious.
Anti-fraud systems have a hard time dealing lithuania phone number with this type of scam, but it falls into the same category as stolen data—purchase history and suspicious behavior are the basis for blocking a purchase.
Self-scam (Chargeback Scam) — Common
One of the most common types of scams in e-commerce is the self-scam.
In these cases, the cardholder is the one who carries out the scam. The purchase is made normally, but when it arrives, the scammer requests a refund and keeps the merchandise, claiming it never arrived.
This is a very complicated case for anti-fraud systems, as it is very difficult to know that the scammer has fraudulent intentions at the time of purchase.
However, anti-fraud systems can still find signs of this behavior with card brands, seeking to understand whether refunds for online purchases are common.
The first scams that the fraudster applies are usually successful, precisely because anti-fraud systems do not identify this behavior previously.
As the scammer continues to scam other e-commerce sites, this behavior becomes more evident and easier to stop.
But there is another scam that shares some of the characteristics of the self-scam. Let’s talk about it below:
Interception Strike — Uncommon
This scam is full of ramifications.
Initially, the scammers use various cards to carry out the scam. Then, they create an online store with false information and begin selling these products.
In some cases, the stores created are the same as other well-known stores and marketplaces.
So, to build a reputation for this fake store, the scammers actually deliver the packages.
But as it gains traction, the last part of the scam comes into play: the sale without delivery.
It’s a game of reliability. First, it’s built. And then, it’s used to sell a lot and not deliver.
Naturally, these fake sites always end up disappearing. After generating significant revenue, the scammers delete the site, create another, and continue operating. These are the most common scams we find on the market today, but they are not the only ones.
There are several types of scams, and many have not even been detected by anti-fraud systems.
The point is that the approach of anti-fraud systems is more universal. Their analysis doesn’t need to be as creative as the scams; they just need to be extremely efficient. That’s enough in most cases.