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Online Fraud is Still Around, and that’s Not a Bad Thing


According to the information acquired from Forter, an e-commerce fraud-prevention firm in its yearly Fraud Attack Index 2017, cases of online fraud will still be prevalent. The report has been scrutinized by CNBC and will be made available in November 2017.
 
It is noteworthy that online fraud cases have been reduced in the last one year, after experiencing a surge in the previous years. According to the report, about two percent of domestic transactions were exposed to the dangers of fraud. Experts in fraud are discovering more creative ways to find their victims.  More individuals are getting involved in fraudulent activities, and it will not be long before we start feeling the impacts of large-scale data infringements; a similar case of the hacking of the data on 145 million persons at credit reporting firm, Equifax in the early part of this year. 
 
Though stability of online fraud cases is still a good idea, the rate is above expectations. With the new techniques employed by the perpetrators of this act, there is a need for companies to be more cautious according to the suggestion of Michael Reitblat, CEO of Forter. He observed that fraud has always been in existence and there are no signs that it will be entirely eradicated. He opined that as soon as a fraudulent case is discovered and nipped in the bud, the perpetrators will find another spot to carry out the heinous act.
 
As a venture capital-backed cybersecurity company that focuses on real-time fraud discovery, Forter has worked in collaboration with the Merchant Risk Council to release the yearly report after a careful analysis of several transactions. Most of the customers of the Forter brand are Delivery.com and Fiverr.com which have e-commerce embedded in their purchases. With the assistance of unknown shopper data, Forter identifies fraud patterns that are familiar to several customers. Machine learning enables the system to have a fast responsiveness and develop as various techniques of fraud becomes more popular.
 
As soon as a buyer clicks “complete transaction” on one of the websites of Forter’s customers, its system makes a comprehensive run through 6,000 data elements. These elements include the type of device used, the identity of the buyer and seller and the shipping location of the item and this will calculate the risk and confirm if it is worth it. It informs the system on the next thing to do; maybe cancel or approve the transaction process.
 
An “Arms Race” of Frauds
According to the report made available, it observed that the approximate balance of e-commerce fraud is an interesting factor, but the battle is far from being won. The process of preventing fraudulent online activities has been likened to the relationship between cat and mouse. An increased clampdown on the websites of luxury and apparel merchants recently made the owners to enhance their website against fraud. This action caused the fraudsters to shift their attention to other merchants who deal in the sales of food and electronics.
 
In 2017, the luxury goods merchant websites recorded a decrease in fraudulent activities as it reduced by 32 percent. The digital goods and apparel websites also reduced by 26 percent and 11 percent, correspondingly. Food and beverages sellers are not lucky as the fraudsters have moved into their domain and the attacks have increased at a double rate, and the fraud in electronics has increased to 55 percent.
 
It is good to note that electronics and apparels have a handy market readily available for them to resell these goods, and this factor has made the niche an attractive spot for the perpetrators of this criminal act to focus on them. More cases of fraud are reported in the beverages and food.
 
We Are All Involved
Most often, we have this impression that the regular fraudster is the person sitting down in a secret location compromising people’s account and making orders for gift cards. It has shown that the culprits are the customers who are abusing the promotions package offered by the company and Forter has identified this scenario as a policy abuse.
 
 
These customers are engaged in abuse of referrals and coupons. These individuals are making use of virtual private networks and proxy settings to conceal their identity and location. It is important to know that creation of a burner email address to enjoy a promotion meant for the first-time buyer; it is a clear sign of policy abuse.
 
When a Little Fraud is a Good Idea
The case of the online retailer losing to fraud experts is not in its entirety a lousy idea. If an e-commerce business entity can curb the instances of fraud on its platform, it will have an adverse impact on their business and result in low sales. It has been observed that a secure and complicated system that helps fight fraud can chase potential clients from your brand.
 
According to the CEO of Forter, losing business in a broad market as the United States has more negative effects than the online fraud. He opined that business owners should learn to manage fraudulent cases and must not be bothered about the total eradication.