Beware of Internet Fraud: How to Detect Fraudulent Online Ordering Activity for E-commerce Websites
Internet Fraud is on the rise with scammers not only sending out proliferations of scam emails for lottery scams, the 419 or ‘Nigerian' scams, multi media piracy, investment and securities scams, chain letters and pyramid scheme scams, and unlawfully selling prescriptions online there is a rising trend in general internet fraud for the online trader.
If you are the owner of an E-Commerce website you must be particularly vigilant these days in the arena of the world wide web to protect your business from online fraud. As an online trader myself I have witnessed first hand the regular and increasing attempts to defraud our jewellery business through online ordering. Many of these fraudsters are identified before they can actually place an order through our website's ecommerce systems, occasionally an order slips through and gets approved by our online ordering systems so in this case how do you identify that it's a suspicious transaction?
The key identifying tags of ‘online fraud'…
Typically a conman will first send you a ‘feeler' email with a simple subject matter saying they are interested in purchasing your products and ask if you accept certain types of credit cards and whether you ship internationally. There will usually be no mention of a specific product that they are interested in. They will also nominate a country where they want the order delivered to. If they mention Lagos, Nigeria or South Africa then delete the email immediately and block the sender and take no further action. The majority of these types of scams will originate from Nigeria using stolen credit cards. However don't be fooled by the legitimacy of a country's location we have received these types of scam emails from the UK, Ireland, USA and parts of Asia.
If you are unsure as to whether the email is a scam you can check the IP Address of the sender in the email header for a match in the Internet Registries to verify which country the email is originating from. To access an email header and locate the IP Address of a sender, right mouse click on the title of the spam email in your inbox and select ‘options'. The authentic IP Address is usually the one listed at the bottom of the email header, in most cases all of the information provided at the top of the email header is false and is used to conceal the real identity of the sender. When you have located the IP Address enter it into the following Registries of Assigned Internet addresses to search for a match:-
APNIC (Asia Pacific network) www.apnic.net/whois
RIPE (European) www.ripe.net
ARIN (American Registry) www.arin.net
LACNIC (South America & Caribbean) www.lacnic.net
If there is a discrepancy between the location of the Internet Service Provider and the customer's stated country of origin in their email you can be pretty certain it is an email scam.
Another indication that you are being contacted by an email fraudster is that they will order several of the same product and colour and have little regard for the cost of freight. They will often select the most expensive International Courier methods of freight delivery.
If the email sender is presenting themselves as an established business with a website address then you can check their website URL for legitimate contact details. If it is a scam often the website will be ‘under construction' or have a page holder in place. You can check this business out further by typing their business name into the Google search engine and see what results turn up. If this is a scam often other businesses will have been targeted too and they will sometimes publicly report the scam artist online and their details.
If you are still unsure as to whether you are dealing with a fraudulent email scam then proceed by sending a polite email asking for more details, specifically the products the customer is interested in, their address and contact details for delivery. You will then be able to quickly ascertain from the email responses whether the order is genuine. In most cases the sender will give a vague response or typically order several of the same item (usually a high ticket priced item) and select an expensive freight method.
As the holder of a merchant account you are liable for accepting payments made with stolen or falsified credit cards. Suspicious orders will generally exhibit some of the identifying factors listed above, multiple products of the same type ordered and expensive methods of freight selected. However be wary as these types of scam artists are becoming more sophisticated in their approaches and a fraudulent order that has made it through your online ordering systems and has been approved may only be identifiable by the method of freight they have selected as ‘Express Courier International Freight'.
The fraudster may test with a small order first to see if the credit card payment has been approved and if you have not detected the order as fraudulent, they will then send through another order within a short time frame usually within a week so they can get the most benefit out of the stolen credit card before it is detected or reported stolen by the owner.
I have also encountered cases where the fraudster has set up an email account in the name of a legitimate customer (identity theft) with contactable phone numbers and address details and then adjusted the delivery address details via email contact using a valid email address prior to the order being sent out.
Prevention measures to counteract online fraud…
So what can you do if you receive a ‘suspicious order' that has successfully been processed through your website including credit card approval:-
• Firstly check with your bank to see if the credit card has been reported missing or stolen.
• If you still believe the transaction to be fraudulent then have the transaction reversed and the money credited back to the credit card involved. You have the right to refuse any payments that you feel are suspicious.
• Inform the customer that you suspect the transaction is fraudulent and refuse to accept the order. You can request that if they are still interested in the purchasing the goods that they pay by an alternative method such as money order, bank transfer or Paypal.
• Do not send any goods out to the customer. If you have sent goods out and they have not yet reached the customer then have the delivery stopped and the parcel returned to you. At least this way you will recover some of the costs of the order to your business.
• Disable any customer accounts or member logins in your website database have been identified as fraudulent.
Make sure that you educate your staff involved in processing orders as to the telltale or possible signs of a fraudulent online order and be vigilant in detecting online fraud in emails and approved online orders. Credit card fraud can become a costly expense for your internet based business so be wary.
© Rosemary Donald, Rank1 Website Marketing 11th August 2007
www.rank1websitemarketing.com
If you are the owner of an E-Commerce website you must be particularly vigilant these days in the arena of the world wide web to protect your business from online fraud. As an online trader myself I have witnessed first hand the regular and increasing attempts to defraud our jewellery business through online ordering. Many of these fraudsters are identified before they can actually place an order through our website's ecommerce systems, occasionally an order slips through and gets approved by our online ordering systems so in this case how do you identify that it's a suspicious transaction?
The key identifying tags of ‘online fraud'…
Typically a conman will first send you a ‘feeler' email with a simple subject matter saying they are interested in purchasing your products and ask if you accept certain types of credit cards and whether you ship internationally. There will usually be no mention of a specific product that they are interested in. They will also nominate a country where they want the order delivered to. If they mention Lagos, Nigeria or South Africa then delete the email immediately and block the sender and take no further action. The majority of these types of scams will originate from Nigeria using stolen credit cards. However don't be fooled by the legitimacy of a country's location we have received these types of scam emails from the UK, Ireland, USA and parts of Asia.
If you are unsure as to whether the email is a scam you can check the IP Address of the sender in the email header for a match in the Internet Registries to verify which country the email is originating from. To access an email header and locate the IP Address of a sender, right mouse click on the title of the spam email in your inbox and select ‘options'. The authentic IP Address is usually the one listed at the bottom of the email header, in most cases all of the information provided at the top of the email header is false and is used to conceal the real identity of the sender. When you have located the IP Address enter it into the following Registries of Assigned Internet addresses to search for a match:-
APNIC (Asia Pacific network) www.apnic.net/whois
RIPE (European) www.ripe.net
ARIN (American Registry) www.arin.net
LACNIC (South America & Caribbean) www.lacnic.net
If there is a discrepancy between the location of the Internet Service Provider and the customer's stated country of origin in their email you can be pretty certain it is an email scam.
Another indication that you are being contacted by an email fraudster is that they will order several of the same product and colour and have little regard for the cost of freight. They will often select the most expensive International Courier methods of freight delivery.
If the email sender is presenting themselves as an established business with a website address then you can check their website URL for legitimate contact details. If it is a scam often the website will be ‘under construction' or have a page holder in place. You can check this business out further by typing their business name into the Google search engine and see what results turn up. If this is a scam often other businesses will have been targeted too and they will sometimes publicly report the scam artist online and their details.
If you are still unsure as to whether you are dealing with a fraudulent email scam then proceed by sending a polite email asking for more details, specifically the products the customer is interested in, their address and contact details for delivery. You will then be able to quickly ascertain from the email responses whether the order is genuine. In most cases the sender will give a vague response or typically order several of the same item (usually a high ticket priced item) and select an expensive freight method.
As the holder of a merchant account you are liable for accepting payments made with stolen or falsified credit cards. Suspicious orders will generally exhibit some of the identifying factors listed above, multiple products of the same type ordered and expensive methods of freight selected. However be wary as these types of scam artists are becoming more sophisticated in their approaches and a fraudulent order that has made it through your online ordering systems and has been approved may only be identifiable by the method of freight they have selected as ‘Express Courier International Freight'.
The fraudster may test with a small order first to see if the credit card payment has been approved and if you have not detected the order as fraudulent, they will then send through another order within a short time frame usually within a week so they can get the most benefit out of the stolen credit card before it is detected or reported stolen by the owner.
I have also encountered cases where the fraudster has set up an email account in the name of a legitimate customer (identity theft) with contactable phone numbers and address details and then adjusted the delivery address details via email contact using a valid email address prior to the order being sent out.
Prevention measures to counteract online fraud…
So what can you do if you receive a ‘suspicious order' that has successfully been processed through your website including credit card approval:-
• Firstly check with your bank to see if the credit card has been reported missing or stolen.
• If you still believe the transaction to be fraudulent then have the transaction reversed and the money credited back to the credit card involved. You have the right to refuse any payments that you feel are suspicious.
• Inform the customer that you suspect the transaction is fraudulent and refuse to accept the order. You can request that if they are still interested in the purchasing the goods that they pay by an alternative method such as money order, bank transfer or Paypal.
• Do not send any goods out to the customer. If you have sent goods out and they have not yet reached the customer then have the delivery stopped and the parcel returned to you. At least this way you will recover some of the costs of the order to your business.
• Disable any customer accounts or member logins in your website database have been identified as fraudulent.
Make sure that you educate your staff involved in processing orders as to the telltale or possible signs of a fraudulent online order and be vigilant in detecting online fraud in emails and approved online orders. Credit card fraud can become a costly expense for your internet based business so be wary.
© Rosemary Donald, Rank1 Website Marketing 11th August 2007
www.rank1websitemarketing.com
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