I Don’t Have a Fraud Problem!
This is the most common response I hear when I tell ecommerce business owners that I am from Kount. These owners and managers talk about how they don’t have a product that fraudsters want, they’ve never had a chargeback issue or they will worry about fraud later. Of course, no company has a fraud problem. Until they do.
A few days after Christmas last year, one company was hit by a fraud ring using a “bot” network which attempted to make purchases with fraudulent credit cards more than 8,000 times in a period of just three days. Then it was done. It went as fast as it came. No warning signs, simply hit and run.
Realistically, there are two types of ecommerce businesses, those that have been hit by fraud (whether they know it or not) and those that will be hit by fraud. Cyber criminals continue to develop larger networks, faster systems and more sophisticated techniques to steal from companies. They can go undetected for days, weeks or months before managers realize they have a problem.
Luckily, there are several symptoms that could be early warnings signs of fraud that you can act on before more damage is done. Here are a few questions to consider:
- Are your chargeback rates over 0.5%?
- Do you reject/decline more than 1% of your orders?
- Are you experiencing a high rate of shopping cart order abandonment?
- Do you have high affiliate turnover?
- Are you manually reviewing 10% or more of your orders?
- Do you hesitate when accepting orders from certain IP addresses, geographies or countries?
Of course, these are not hard and fast rules but they can be indicators that you have a fraud problem. It’s an uncomfortable topic for some because nobody wants to admit there could be vulnerabilities in their payment systems and approval processes. Or maybe fraud mitigation systems seem too complex, costly and require IT resources your company doesn’t have.
Fortunately, there are options available that can make fraud mitigation painless to implement and easy to manage. Fraud management can be up and running in a matter of a few days or a few weeks depending on your circumstances.
Don’t get caught off-guard. Fraud follows opportunity. As your business expands, it is only a matter of time before fraud finds you.