As the Philippines continues to enjoy an unprecedented boom in its digital economy, financially motivated cybercrimes have also proliferated. More than ever, protecting your customers and your business’s reputation from malicious parties is something you need to take seriously.
Websites, online payment platforms, customers, and employees are all vulnerable to different types of e-commerce fraud. To mitigate these threats, it's necessary to understand them. To that end, let’s examine nine common types of e-commerce fraud that could damage your online business.
1) Credit Card Fraud
Though “credit card fraud” usually refers to fraud involving credit cards, the term is sometimes used to describe similar crimes involving debit and virtual payment cards. Regardless of the payment card type involved, criminals may obtain card information through a variety of means, including but not limited to skimming devices, hacking, and confidence scams. This type of fraud can also occur over any online payment processing service or physical terminal.
To prevent credit card fraud over computer networks, make sure to use an online payments gateway that adheres to global anti-fraud best practices. The popular Maya Checkout payment gateway from Maya Business offers best-in-class security for Philippine-based e-commerce sites, going above and beyond typical cybersecurity practices. Moreover, it integrates easily into a variety of web frameworks and is now the third-party payment gateway Shopify and WooCommerce online store owners depend on to keep their businesses safe online.
2) Chargeback Fraud
Chargeback fraud is one of the most common kinds of fraudulent activity. It happens when a customer disputes a charge on their credit card for invalid reasons, with the intent of getting a refund.
It is true that some chargeback disputes are sometimes not malicious and is usually just borne out of misunderstandings of the credit card payment cycle or forgetfulness, leading it to sometimes be called “friendly fraud.” However, not all cases of chargeback are benign. For instance, a customer might intentionally claim the product they received was damaged when it wasn’t. Eliminating this kind of fraud completely may be impossible, but it could be reduced through stronger customer verification processes.
3) Phishing and Social Engineering
Also known as “confidence scams,” these activities involve the use of deception and manipulation to make individuals divulge sensitive information. This fraud can occur through phishing emails, instant messaging platforms, fake websites, phone calls, and in person. These attacks are used to gather all kinds of information, but they’re often used to gain login credentials and payment card details. These scams can be highly elaborate, sometimes taking place over months or years to slowly gain the trust of victims.
Criminals are constantly innovating new ways to perform these attacks, but the vast majority of attempts stick with tried-and-true strategies. Educating your employees and customers on how to spot these common scams is critical for keeping your business secure.
4) Identity Theft
Identity theft happens when an individual uses someone else’s personal information or credentials to misrepresent themselves. This is most often done to open accounts or make purchases under the victim’s name without their consent. These attacks can be done through a variety of online and offline channels, endangering any party that shares or gathers personal details.
5) Fraudulent Account Takeover
This type of fraud happens when an unauthorized party gains access to a customer’s online account, such as one used for internet payment solutions. This can happen through phishing and other fraudulent activities, but it can also occur due to the customer’s negligence, as can happen when a fraudster accesses an account on an unattended computer without the accountholder’s permission.
6) Refund Fraud
Refund fraud happens when someone requests a refund for something they are not entitled to. This could be because, similar to a chargeback fraud, they are making false claims about the product they received. However, it’s also possible that that malicious actor never really made the purchase in the first place or is claiming the refund amount from multiple parties. Perpetrators of these kinds of fraud can be using stolen identities, which can be especially damaging to a victim’s reputation.
7) Counterfeit Products
This common type of fraud affects both legitimate businesses and customers. Not only do customers often get substandard products without their knowledge but the businesses whose brands are being misrepresented also suffer damage to their reputation.
This type of fraud is difficult to combat due to the sophistication of many counterfeiters and the massive demand for lower-cost bootleg products. To minimize reputational damage, businesses should take care to vigorously protect their intellectual properties and pursue criminals through appropriate channels.
8) Affiliate Fraud
This fraud occurs when affiliates try to earn commissions they aren’t legitimately entitled to. They may use fake accounts, click farms, bots, and other strategies to inflate their commissions.
Affiliate fraud does not usually affect customers, but it can be a serious drain on your business’s finances. It can be difficult to identify this type of fraud unless you compare the metrics of different affiliates, particularly the quantity of leads and the relative number of conversions.
Enjoy Secure Hassle-free Online Payment Processing with Maya Online Payment Solutions
With its adherence to globally recognized cybersecurity practices, Maya has emerged as the leading online payment processing company in the Philippine e-commerce market. Create your Maya Business Manager account to activate Maya payment solutions and have every online payment processed to the highest security standards.
Signing up for Maya Business Manager lets you in on the Maya 1-2-3 Grow bundle. Maya 1-2-3 Grow gives you a 1% MDR (merchant discount rate) discount on all QR Ph transactions for 3 months after signing up for Maya Business Manager. With the Maya 1-2-3 Grow discount, your business will save an extra PHP 14,600 for every PHP 1 million in QR Ph sales.
The Maya 1-2-3 Grow bundle also gives you access to a Maya Business Deposit account for your settlements. It comes with a market-leading 2.5% per annum interest rate, which is 20-25x faster than competing banks. With Maya Business Deposit’s interest rate, you will earn PHP 25,000 each year for every PHP 1 million deposit. You’ll also get to enjoy Maya Business Deposit’s zero maintaining balance and free fund transfers via InstaPay and PESONet.
Lastly, the Maya 1-2-3 Grow bundle qualifies you for a Maya Flexi Loan offer as high as PHP 2 million in just 3 months—perfect for building stronger anti-fraud and cybersecurity systems for your business. To get a better loan offer, just use Maya as your primary processor for all wallet and card payments.
Complete your Maya Business application today to enjoy the Philippines’ best online payment processing solutions and exclusive perks through Maya 1-2-3 Grow bundle.
