Ecommerce credit card fraud is one of the most common themes in online fraud that people will come in contact with. Many e-commerce businesses are owned by normal people, trying to earn some normal money. There are definitely some companies and consumers which will intentionally cause problems with their transactions to get ahead with the situation.
Unusual Payment Schedule
Some instances of credit card fraud on internet e-commerce sites will be based upon unusual payment schedules. Companies that charge a monthly fee for their services may be able to get away with charging a credit card multiple times within the month and not be noticed by the consumer. These charges can be small fees for instance that build up over time for several customers building up a hefty extra income by taking extra unexplained charges.
Consumers do a Chargeback after Receiving Goods or Services
E-commerce website owners are in for a wild ride when they have successful website selling large amounts of stock. They can easily be making sales on a daily basis that seem similar and not unusual. A person may have a legitimate reason to purchase multiple items or a very expensive item while a fraudulent buyer would do the same thing but with the intent of committing online credit card fraud.
They will make their purchase and wait a small amount of time before running a chargeback once they have what they ordered in their hands. The credit card company will simply rule in the consumer’s favor in many cases causing the e-commerce site to have to deal with losses and fees associated with chargebacks.
Using Fake Online Accounts to Transfer Money
E-commerce is generally an ok option but some people will use their knowledge of the background processing done through payment processors to move around money. This way they can get money deposited into accounts that they can withdraw from and cannot be traced to. This may also be done in a way to avoid taxes on income they are making. This is an example of credit card fraud merchants and they may cause a great deal of trouble for their customers as well.
Lack of Security Authorization for Orders
E-commerce sites are often a target of credit card fraud on the internet because a large portion of these sites are run by inexperienced or unknowing merchants. They may use payment processing services that are generally not very good at security authorization. This will allow more fake orders to get through that are fraudulent in nature. The credit cards are charged even though the name and other information is not correct. One of the main reasons for this happening is due to the fact that these e-commerce sites choose to use processing options that do not require CCV or date verification on cards to place an order.
Failure to use Address Verification System
Internet credit card fraud certainly is not a great condition to deal with if you are an e-commerce website. One method that fraudsters can actually get away with what they are doing is by making illegitimate purchases that go to fake addresses. The packages make their way to abandoned houses or to lots that do not exist and the original card owner has to deal with the charges. The e-commerce site can also face some serious legal whiplash from not verifying the address attached to the card with the address that the products are shipped to. At least until the issue is fixed by the e-commerce business owner.