Fraudulent activity is only becoming more common as the majority of financial transactions have moved to the internet. Criminals are aware of this, which is why internet scams are becoming more complicated, advanced, and difficult to detect. When it comes to protecting your own information, or your customer’s, the first step is to be aware of new scams so that you can be prepared if you happen to encounter them. Below, we’ll also discuss how to ensure your site is secure so you can prevent fraudulent activity from occurring.
What is Triangulation Fraud and How Does it Work?
Triangulation scams involve three parties; the first being a legitimate buyer on the hunt for a good deal, as well as a fraudulent actor looking to take advantage of both the buyer and an unsuspecting third individual’s financial information. The buyer may find a good deal on a reseller site like eBay, but after they place their order, the buyer’s money goes straight into the scammer’s pocket. Stolen credit card information from someone else is used to purchase the item directly from the retailer and is then sent to the buyer’s address.
This scam is effective because the original buyer never discovers that they’re involved in a scam; they just think they’ve gotten the item they wanted at a great price. The individual whose credit card information was stolen must then dispute the charge with their bank, leaving the either the financial institution or the supplier with the bill. Since the seller uses the buyer’s information to fulfill the order and the stolen credit card information to make the payment, their name is never used. This makes it difficult to track down the criminals behind these complicated scams.
Since the customer isn’t aware of the scam, they often leave the transaction feeling positive about their purchase and may even leave a good review. This means that there could be many fraudulent sellers on reseller marketplaces who appear to be providing a satisfying experience. The retailers who supply the products feel the impact too, as they will likely see an increase in chargebacks from the original owner of the stolen credit card, leading the retailer with no choice but to refund them and lose that revenue.
How to Prevent Triangulation Fraud on Your Site
For retailers looking to get ahead of this new scam and ensure that they’re prepared in the event of fraudulent activity on their site, keep the following in mind:
Monitor Behavioral Patterns: You’ll likely notice an increase in chargebacks when scammers are making unauthorized purchases on your site. An indicator for seller accounts may be if they have a large amount of inventory but appear to be new, with few ratings or reviews. Another red flag is when there are significant differences between shipping and billing information, or multiple transactions placed from the same individual within a short period of time are all details that mTriangulation Scam Awareness: Defense Strategies for Retailers ight be a sign of suspicious activity.
Track Common Item Categories: The nature of this scam involves selling specific items that will be worth it to scammers looking to make a profit. High-ticket items are more likely to be flagged, so scammers often target categories like cosmetics and even coffee machine pods. Keep an eye on these target item categories, or focus your anti-fraud eCommerce technology on these item types to automate fraud detection.
Ask for Verification: To prevent scams from happening in the first place, you can require that customers verify that their shipping address matches their billing address when certain patterns are detected. You can simply ask suspicious accounts for additional verification as well to verify that they’re not attempting to take advantage of you and your customers.
Final Thoughts
There are many anti-fraud tools like Hawk and Telesign that can integrate with your eCommerce platform to automate the detection of suspicious activity, so you don’t have to constantly monitor behavioral patterns to catch scammers after they’ve already placed an order. If you’re looking to migrate to a platform that’s equipped with eCommerce technology design to combat fraud, set up a consultation today to learn more about Virid’s eCommerce platform, marketAgility. With the highest standards for data security, switching to marketAgility can help you optimize your eCommerce site for growth.
Sign up for our newsletter for more eCommerce insights.
