Ecommerce fraud can take several forms, including account takeover, identity theft, and friendly fraud. To detect and prevent ecommerce fraud, sellers should verify customer information like IP addresses, email addresses, phone numbers, shipping addresses, and orders. They should also maintain a database of fraudulent customers and be aware of common types of fraud against both consumers and sellers, such as phishing and bogus returns. Buyers can also take precautions like reviewing seller feedback, insisting on safe payment and delivery methods, and keeping records of transactions.

1. Ecommerce fraud
Mitesh (11808211)
Sushil (11808218)

2. What is fraud?
Fraud is an intentional false representation of a fact. The
purpose of fraud is to deceive another party in order to obtain a
profit. This profit can be:
● Money
● Goods

3. What is ecommerce fraud?
E-Commerce fraud is an illegal or false transaction made in a
webshop. The big difference between physical and online payment
fraud is, that, the card does not need to be present when making an
online transaction. The fraudster simply needs the card information.
Hackers can steal this information as it is often stored and
transferred digitally.

4. The main e-commerce fraud types
Account takeover
We can talk about the case of an account takeover if a fraudster
intentionally acts like a real customer, such that he/she gains control
over an account and makes an unauthorized financial/information
transaction with the aim to drive a material benefit.

5. Identity Theft
In identity theft, a thief simply takes over someone’s identity in
order to make purchases in their name, and with their resources. It’s
surprisingly easy to do, especially for experienced identity thieves.
With some basic personal information, such as name, address,
phone number and/or credit card details a fraudster can order items
online and have them charged to someone else’s credit card or bank
account.

6. Friendly Fraud
Friendly fraud isn’t really all that friendly, especially for
ecommerce merchants. This is where a customer purchases goods
using some “pull” method like a credit card or direct debit and then
initiate a chargeback, claiming that they didn’t place the order and
that their account details had been stolen. They are reimbursed by
the merchant, and they keep the goods or service.

7. E-COMMERCE FRAUD DETECTION
Awareness of the latest e-commerce fraud types is essential.
Though, it doesn’t excuse your online store from risks. All you need
is to know how to timely detect the threats and prevent the
undesirable results manually and with the use of advanced tools.

8. IP ADDRESS VERIFICATION
● make sure the user’s IP address coincide with the billing address
indicated in the customer’s form.
● check the IP is not the address of a public proxy server.

9. E-MAIL ADDRESS VERIFICATION
The simplest way to verify a suspicious email address is to
check it via popular search engines like Google, Yahoo, etc. The
search result can help you detect whether the address was used for
any fraud attempts. The email can be mentioned in shared
blacklists, on forums, blogs, e-commerce or any other media posts
that speak about any fraudulent experience related to the email.

10. PHONE NUMBER VERIFICATION
Make the ‘customer’s phone number’ obligatory for the
application form. Then you’ll be able to check a suspicious order
using the information. It’s not a secret, fraudulent customers
normally fill in non-valid phone numbers. However, the statement
requires deeper examination, because not all legal customers agree
to give away their genuine phone numbers.

11. SHIPPING ADDRESS VERIFICATION
Make sure the shipping address matches the billing address
filled into the customer form. For this, you can apply any
convenient digital map (e.g.: Google Map) to pin the addresses on
the map and measure the distance between the two of them. If the
addresses go beyond two different states, the order is more likely to
be fraudulent.

12. MULTIPLE ORDERS WITH DUPLICATE
PRODUCTS VERIFICATIONLarger orders with duplicate product items normally arouse
merchant’s suspicion. When receiving an order, which sufficiently
differs in the order total, items quantity or recurring items from an
average order in the store, verify the client’s identity in any possible
way.

13. LIST OF CONFIRMED FRAUDULENT CUSTOMERS
Keep all the available information aligned with previous
fraudulent attempts/acts on a separate file. This can be email
addresses, shipping locations, phone numbers and any other data.
Checking the list of red-flag fraud attempts makes the processing of
suspicious orders faster and more efficient.

14. Types of E-Commerce Fraud as Against the Consumers
Phishing is also a very common form of internet fraud.
With phishing comes theft of identity. Phishing is the process by
which fraudsters try to gain sensitive information of the user like
credit card/debit card number, email id, passwords, etc. often for
malicious purposes.
consumer cannot actually check the product himself.
return and refund policy of the seller.

15. Types of E-commerce Frauds as Against the Seller
Gift Card Fraud
This type of frauds are committed by making free e-mail account
with wrong information. Since the purchase of a gift card online
requests only an email address in order to receive a confirmation
code, this allows the fraudster to purchase many gift certificates on
one [stolen] credit or debit card and send the gift card credits to
multiple email addresses. Many sites also offer some discount to
consumers when they register themselves for the first time on the

16. Bogus Returns
Just like customers receiving inferior or fake products, the
sellers also face a very similar kind of problem many times. The
buyer will buy a product online. After receiving the product, the
seller will file a complaint with the buyer that the product he
received is damaged or defective. The customer will ask for a
refund, and while returning the product to the seller, the buyer will
replace the actual product with something else. Sometimes a
product may come with several components or items. The customer
will send back only one item back to the seller, and the product is

17. Steps Buyers/ Consumers Can Take to Detect and
Prevent Fraud
Use Good Sense
This point goes without saying. The internet can be a wonderful
place, but when dealing with strangers, the buyer should use
common sense. If something seems too good to be true, then
probably it is too good to be true. The buyer should start with
buying small items, and get accustomed to how online transactions
work.

18. Check Different Sites
Agreed that most of the sites are similar in nature, but a buyer
should always check multiple sites before going through with a
transaction. The buyer should compare prices, return and refund
policies on different sites.

19. Review Seller Feedback
Many sellers, to improve their own business activities, provide
an opportunity to buyers to review the seller and his products. A
buyer should always go through a few of the reviews to know the
views of other buyers and decide whether the transaction is worth
taking the risk or not.

20. Insist on a Safe Payment Method
The best option is to use the mode of payment, which is
traceable so that even in the case of a fraud, a certain line of inquiry
remains.

21. Insist on a Traceable Delivery Method
The buyer should go for an established shipping and delivery
method which is traceable, can be tracked online and require a
signature when the product is delivered. If a shipment method is
used which can’t be traced, the opposite party can always claim that
the shipment was never received. Also, the buyer should preferably
purchase those items which are backed and verified by the seller.

22. Keep Records
The buyer should always keep the records of the transaction
intact. Not only the tangible bills and receipts, but also the
acknowledgement emails, order confirmation mail, and shipment
mail sent by the seller.

23. Steps Retailers/ Sellers Can Take To Detect And
Prevent Fraud
Retailers Can Provide For Mandatory Data Fields-
The retailer can make some fields compulsory like contact
number of the buyer, his email address, his address, pin code, etc.
which can be verified by the seller. For example, the seller can cross
check the contact number code or pin to ensure that they are
concurrent with the city and state address of the cardholder’s

24. Verify Cardholder’s Information
Using the email address and name of the
cardholder, verify the information provided by him
through a reliable data source using electronic identity
verification services (eIDV) to ensure the highest
confidence in the data provided by the buyer.

25. Send Confirmation Mail
The seller should always send a confirmation mail,
acknowledging the order. This will ensure that the
email id is valid. If the confirmation mail bounce, it
may indicate that it is a fraud account.

26. Creating an Internal Negative File Database
By creating a negative file database, retailers can
prevent fraud. The file should contain vital
information like email addresses, contact numbers,
passwords, names, credit card numbers, etc. earlier
used to commit any fraud.

27. E-COMMERCE FRAUD PREVENTION
● well-timed updating;
● strong passwords;
● two-factor authentication;
● firewall usage;
● errors & suspicious logs;
● backend URL change;