While there are many potential areas for fraud, here are some of the key types and kinds of activity we’re seeing right now:
Account takeover (ATO) is near the top of the MRC’s list of fraudulent attacks experienced by eCommerce businesses. ATO involves an attacker stealing a user’s login credentials to break into their account, where they can access private information. A potential warning flag might be a small seller with little history that suddenly has significant transaction volume, resulting in a very large payout from the marketplace. It may be legitimate, but it’s also possible that the account has been hijacked. ATO is frequently used for the purposes of credit card fraud.
Gaming the System
There are a number of ways sellers can attempt to “game the system.”
- Brushing – fake reviews, to increase or decrease store ratings
- Store burning — a mass attack on a particular store engineered by a competitor for the purposes of discrediting or disbarring said store
- Price manipulation — artificially driving up prices by appearing to increase demand or availability
For this type of fraud, sellers will either simply not ship items that have been paid for and close their account. More complex schemes involve provide shipping information and tracking numbers that are either fake, or real tracking numbers that pertain to a different shipment.
Bad-actors may set up stores that advertise certain labels, but actually provide counterfeit goods. For example, the buyer thinks they are receiving a Rolex watch at an excellent price, and receive a watch that is not the real deal.
In buyer-seller collusion, the colluding parties form the two sides of a retail transaction—merchant and customer. This may be for any purpose from increasing sales to collecting promotion money illegally to sinking competitors to money laundering. Detecting and untangling collusion is particularly challenging.
Unfortunately, there are many “bad actors” currently taking advantage of the global pandemic. And it is too early to measure or quantify the impact of this fraudulent activity.
Both marketplaces and payment vendors are seeing a rise in certain types of fraud related to COVID-19:
- SNR/SNAD — false claims of “service not received” or items received “significantly not as described” – resulting in refunds and bringing down merchant ratings
- False advertising — attempts to sell medicines and supplements that claim to have abilities to help cure the virus
- Shipping fraud — tied to purchases of in-demand goods such as masks, gloves, and even toilet paper, where items are not shipped, and/or fake shipping information and tracking numbers are provided
Payoneer takes great care to detect and prevent such cases. However, as many shipments are being delayed due to current massive layers of complexity in cross-border trade, in some cases it is not yet clear whether fraud is being committed, and if so, by whom.