Understanding Ecommerce Fraud and Its types-

Posted by Kirti Gupta on

Are you running an online business or you are planning to run one? In either case, you are required to know about Ecommerce fraud and its prevention. In this blog, we will cover everything that is related to Ecommerce fraud. We will also reveal ways of preventing the fraud.


What exactly is Ecommerce fraud?


Also known as online fraud, it is a type of fraud that is committed by a cybercriminal on an ecommerce website. As committed, this crime can lead to wrongful transactions, wrong refund requests and much more.


Ecommerce players all across the globe are taking steps to prevent this fraud and sometimes they engage experts so that they are not attacked by cybercriminals. So what are the activities that could be placed under this broad category 'Online Fraud’? Below are the lists of activities that you can easily place under this category.


Identity theft-

Identity theft is a type of theft where a person’s information is first stoled and then used for performing ecommerce transactions. Trust the studies, as per which the Identity theft, phishing and account theft are more common thefts. Identity theft implies engaging someone’s else personal identity and using it to conduct transactions. Mostly the credit cards of an individual are targeted in this type of theft. For committing this theft, fraudsters steal personal details of an individual like their name, email address, credit card details and much more.

Phishing that is also a type of fraud is conducted along fake emails that are delivered for stealing personal data of an individual.


Chargeback Fraud-

It is the type of fraud where a customer pays using a pulled payment method (engage a debit/credit card) and order a product. As the products are safely shipped or they go out of the retailer’s control, the consumer’s files a chargeback where they claim that their identity has been stolen. Also, the customer keeps the products with them for free. This is one type of fraud that is common and that hurts the retailer a lot.




Friendly fraud- This is a type of fraud committed without any malicious intention. In this type of the fraud, most of the time customers initiate a chargeback in confusion. While the package is mostly booked by the customer, they place a chargeback as they wrongfully believe that their package has been stolen or because they are unable to identify the merchant’s name on the credit card, they perform a chargeback.


Clean fraud-

As the name indicates it is the type of fraud which is done by using a stolen credit card. In this type of fraud, the fraudster steals enough information related to a card and therefore detecting this type of fraud is quite a difficult task.


Triangulation fraud-

This is the type of fraud that mostly employs varied steps. In the first step, the stealer sets up a fake online store for collecting the customer’s data. Later the fraudster employs a stolen credit card and orders the same product from the ecommerce store and gets that shipped to the former victim. The main aim of the fraudster, in this case, is to let the ecommerce store absorb the loss.


Merchant Identity fraud-

This type of fraud leads an impact on the complete ecommerce business only. In this type of fraud, the fraudster sets a fake online store and lists products at impossibly low prices. As the consumer reaches out to the ecommerce store and makes a purchase, not only their details are stolen but the ordered product is never shipped. This leads to lack of trust from the side of the new customers, particularly those who are new to ecommerce.


Apart from them are also mentionable advanced fee and wire transfer scams and affiliate fraud.


Whatever type the fraud is, what is necessary to understand is that they are to be avoided at all costs. For those necessary activities like being PCI compliant, monitoring activities, practising fraud prevention policies and much more must be followed. Get more details about these activities on our next blog.





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