What Is Chargeback Fraud?
Chargeback fraud happens when a consumer purchases a product online and later finds that the product they purchased has not been received, so the credit or debit card used to purchase the product is charged back to the card holder.
Chargeback fraud is a huge threat to online businesses. It can cause legitimate merchants to lose over $2,500,000 per year in revenue.
Chargeback fraud is generally a type of fraud perpetrated by cyber criminals who have compromised the online merchant’s computer systems. The card information used in the order, which is encrypted to ensure that only the merchant is in possession of the data, is stolen by cyber thieves and is then used to create a fraudulent chargeback transaction with the card holder.
Preparing for a Chargeback Fraud Scam
Many people have good intentions when shopping on the Internet, but that does not mean it is a perfect website. Make sure you:
- Research the web store before making a purchase and
- Consider the recommended payment method that the web store is offering
Steps to follow if you think you have been a victim of a Chargeback Fraud:
- Report the fraud to the web store
- Contact your credit card company and request that charges are reversed or refunded
- Make a note in your credit card information stating that a charge was disputed
Tips to avoid Credit Card Fraud
Before you open a credit card, you should be aware of the potential risks of fraud. Find more information about Credit Card Fraud here.
Fighting Back Against Chargeback Fraud
Fraudulent chargeback fraud attempts, particularly where cards are used for illegitimate or fraudulent purchases, are common in eCommerce shopping carts.
Increasing Credit Card Verification Capabilities
To combat fraud, companies are striving to make their online transactions more secure and prevent unauthorised transactions. This helps prevent fraud from being committed against a legitimate payment, even if fraudulent charges are made against it. Using advanced security techniques, merchants are able to verify the legitimacy of credit card transactions. This serves to prevent any fraudulent transactions.
Putting in Processes for Enhanced Online Fraud Management
Fraudulent charges are another form of risk to businesses.
How to Prevent Yourself from Becoming a Victim of Chargeback Fraud
- Avoid orders that include the words "free shipping," "zero tax" or "30-day return policy."
- Make sure you have clearly read every single word on the website.
- Verify order details thoroughly by viewing the "view packaging" section. If it states a custom item, don't order it.
- Do not allow orders to be completed and payment processed without receiving both a screenshot of the invoice, as well as a confirmation number.
- Get an item (or several) that does not include free shipping, and note what the seller says in their shipping costs.
- Don't allow an item to be shipped by an email address you do not recognize.
- If the website is open to public, be careful to not share sensitive information online.
- Before you place your order, check and verify the buyer's details.
Cyber crooks are responsible for carrying out high-profile threats that can include; debit and credit card fraud, drive-by attacks, malvertising and file stealing. They also abuse online marketing services and develop botnets to spread malware and spread malware by distributing malicious software.
The links of most cyber threats mentioned in this article lead to the website of websites or individual victims of cybercrime that are dedicated to this topic.
These websites present technical details of online crimes that are carried out, along with decryption tools to get victims' information. In addition, this information is also related to online marketing services used for identity theft.