In the past two decades the internet has given businesses myriad benefits to interact, entertainment and deliver value to their customers. With a wealth of information at our fingertips, the digital era of the 21st century has truly shaped the way we live, interact and do online business.
However, as the world gradually became more virtual and digital throughout the years and the Covid era, businesses were compelled to go online in order to avoid insolvency. However, as many businesses began to go online, so were there more reports of money being lost due to lack of online safety.
Let’s look at what online businesses should look out for and how they can prevent this.
Table of Contents
The dangers ahead for unprepared online businesses
In the past two years, cybercrime has been on the rise but nowhere near as much as the past two years. In fact, some of the most common fraudulent activities that threatened businesses’ security were
- account takeovers,
- email phishing and pharming
- Data breach
- unsuspected friendly fraud
While the first three can be prevented with genuine data enrichment, mistakes through friendly fraud is a whole new story.
How can Friendly Fraud damage a business
Friendly fraud is a common issue that can happen as a genuine mistake. But what is it exactly? Friendly fraud sees a cardholder file a chargeback against a transaction made on their account, sometimes with the explicit knowledge that they received the product or service.
There are two main ways this can happen.
- First, when a customer makes a purchase but requests a refund from the bank with an excuse that it did not recognise the transactions in their bank account.
- The latter is more of a small error oriented. The problem lies with the merchant for example lack of descriptors on a bank statement, missing products, delivery issues, etc.
Tools used to help identify Friendly Fraud
With the rise of cybercrime it is clear that companies, solopreneurs, startups and generally anyone who wants to avoid an influx of email phishing and pharming from taking advantage of their sites should use several cyber security measures. Most money is lost to cyber criminals who pretend to be someone else, use data breach to take over user accounts or through friendly fraud (as mentioned earlier.) However, friendly fraud is a nuisance that can be avoided.
So now comes the question. How can average online businesses do that without a Riskops team or cyber data knowledge?
There are several methods and tools that can be implemented by a business to prevent fraudulent activities. One of these methods is incorporating social media lookup tools. With these we can get access to user and browser data that can help us reveal certain background checks on buyers and their browsing behaviour.
As an online business you not only need to link an ID to the bank card, but also log information to prove the buyer’s intent. If the data provided by the customer is investigated via a social media lookup tool and it returns a different person than the name on the card, you can then ask for further verification, such as signing an authorization document, or a face ID selfie.
Final Remarks
With the continuous and rapid rise of online retail, dropshipping and eCommerce, the best course of action to avoid mistakes and errors would be through identity verification. This can be done with the right social media lookup tool that can show whether an ID matches someone’s social data.
The key takeaway is to get a glimpse of users and their buyer intent and prevent unverified chargebacks from happening.
Author Info: Robert Kormoczi is a content distribution manager at SEON Technologies and online entrepreneur.
