Fraud FrightsTerrifying eCommerce Fraud Facts, Plus Tips to Keep Your Business Safe This Spooktober
October 27, 2023 | 7 min read
This image was created by artificial intelligence using the following prompts:
A frightened bride of Frankenstein with her hair standing up, holding a credit card in her hand. Spooky Halloween setting, in the style of red and teal.
In a Nutshell
Ghosts and goblins? They’re not so scary. Fraudsters, though... that’s a whole different tale of terror. Say “trick or treat!” cause we’re listing out some of the most common fraud scams out there targeting merchants, and offering some tips to help you exorcise those scammers haunting your online store.
Threats to Watch & Spells to Ward Away Scammers This Halloween
The air is crisp and cool, and the days are getting shorter. You know what that means.
‘tis the season for spooks and scares, and goblins and ghouls. Pretty soon, the kiddos will be out dressed as their favorite beasties, demanding tricks or treats. That chill down your spine isn’t just the weather, though…
In the gloomy corners of the digital realm, a dark tale unfolds. The menace of eCommerce fraud reaches from the dark, waiting for unwitting victims. By the time the witching hour strikes on 2023's final eve, global losses are projected to surpass a harrowing $48 billion!
North America accounts for a staggering 42% of all eCommerce fraud, most of which can be traced to an influx of data breaches, as countless private records are spirited away into the abyss. Amidst this, the ever-present specter of stolen credit cards emerges from the shadows, available to those who dare to tread in the darker corners of the internet.
Unfortunately, the US is the beating heart of this phenomenon, with a disquieting 34% of consumers whispering tales of being ensnared in a fraudster's trap. So beware, for as the Halloween festivities approach, so too, does the ever-stretching web of eCommerce fraud.
The haunting prevalence of fraud on social media, in particular, is a growing concern.
As per the FTC, scammers often operate conspicuously on social media platforms. One in four individuals who have fallen victim to fraud since 2021 identified social media as the origin of their woes.
This is particularly alarming given the vast expanse of the social media landscape, which boasts almost 5 billion users worldwide. And, the average individual engages with seven distinct social platforms each month. This means scammers have ample opportunity to take advantage of potential victims.
The resulting surge in fraudulent social media activity has reached shocking levels in recent years. Financial losses reported due to scams originating from these platforms have skyrocketed to a staggering $2.7 billion. Social media-related fraud losses are now outpacing losses from any other communication method.
It's important to recognize that these horrifying figures only scratch the surface, though. The lion's share of fraudulent activities goes unreported, hinting at a more extensive, spectral issue.
The Most Haunting Scams to Know for 2024 (& How to Stop Them)
While our feeds on social media might be full of spooky memes and pumpkin-spiced everything, that's not the only place where things can get a tad eerie.
According to a chilling study by Juniper Research, eCommerce channels like airline ticketing, money transfers, and banking services are set to lose a whopping $200 billion to online payment tricksters by 2024. The culprits? Craftier fraud strategies and more gateways for online fraud.
Beware! Here are just a few of the scariest scams to be on the lookout for in 2024:
Imposter Entities
The Curse: Things are not always as they appear. Changelings and imposters might approach you with tales of romance, unexpected official messages, or pleas from a “distressed relative.” The imposter’s peculiar preference for gift cards as payment is one sign that you’ve been targeted.
Defensive Spell: Be sure to cross-check the authenticity of an online retailer. Look for verified user reviews on independent platforms, not just those presented on the site itself.
Digital Market Deception
The Curse: Online shopping scams include dubious retail portals or misleading advertisements lurking within genuine sites. And those captivating ads on platforms like Facebook or Instagram? They might just be mirages. Some even employ counterfeit reviews to bolster their disguise.
Defensive Spell: Be sure to cross-check the authenticity of an online retailer. Look for verified user reviews on independent platforms, not just those presented on the site itself.
Elusive Earnings
The Curse: The thrill of winning a prize can be intoxicating. But beware; sweepstakes scams often request personal information, like account login details, before handing over any “winnings.” By the time you realize it’s a trick, the goblin that scammed you has already vanished.
Defensive Spell: Never provide personal information or pay upfront for a "prize." True winnings don't come with a price tag.
Support Vampires
The Curse: Tech support scams are all the rage in the underworld. Alerts about digital threats or solicitous calls from “technical experts” might seem genuine. What’s their true intent, though? Usually, the aim is to acquire your personal or financial data, or to implant malicious software.
Defensive Spell: Never click on links or download attachments from unexpected emails or messages. If a tech “expert” contacts you out of the blue, approach with caution.
Employment Illusions
The Curse: Fake job scams dangle the prospect of a promising role, but it's often a façade. Their digital domains might uncannily resemble those of established organizations. However, it’s all smoke and mirrors; the job offer either never existed, or is part of a larger scam.
Defensive Spell: Before committing, research the company, cross-reference job listings, and steer clear of opportunities that seem too good to be true.
Home-Saving Hoaxes
The Curse: Foreclosure scams claim to shield your abode from repossession. However, the scammer’s true motive lies in appropriating your home or extracting hefty fees from you for no valid reason.
Defensive Spell: Always consult with a known financial advisor or attorney before making drastic decisions about your property.
Deceitful Debt Collectors
The Curse: Debt collection scams are the worst. While many are legitimate, some masquerade with false claims, urging you to settle non-existent or already cleared debts. They’ll use high-pressure language and may even make grave threats against you to get you to go along.
Defensive Spell: Demand documentation. Genuine collectors can provide detailed information about the debt.
Fake FDIC Emblems
The Curse: The FDIC insignia is like a magic talisman of protection. However, misuse of the trusted insignia is a common trick. Scammers use this and other imagery (PCI compliance badges, for instance) to instill confidence and make themselves seem legitimate, only to betray your trust.
Defensive Spell: Always verify a bank's FDIC membership independently via the official FDIC website.
Debt Repair Delusions
The Curse: Credit repair scams promise to restructure your debt rules and get more favorable terms on your behalf. However, engagements with them might lead you further into financial abyss. These scammers will take your personal info, but then do nothing to help you.
Defensive Spell: Before diving into any debt modification, seek counsel from established financial institutions or trusted advisors.
Transactional Tricksters
The Curse: Wire transfer scams are perhaps the most insidious ghouls in the bunch. This happens when swindlers manipulate money transfers to their advantage, then fail to uphold their promises. You’re left holding the bag, and often, leaving your personal data wide open to further scams.
Defensive Spell: Trust only the known and vetted. If an acquaintance makes an unexpected monetary request, ensure you're not being beguiled by a façade.
Need help tackling transaction fraud? We’ve got you covered.
Fraud: as Persistent as the Walking Dead
Remember: things are not always as they seem in the ever-perilous landscape of eCommerce.
As 2024 dawns, it's crucial for cardholders to fortify their defenses against the eerie specter of fraud. By adopting these strategies, they can ensure they remain as vibrant as a town square during a Halloween festival, rather than succumbing to the ghoulish grip of financial loss.
Stay vigilant, and may your finances remain untouched by these spectral scams!
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