Fraud rates show no signs of slowing down. And the pandemic has only accelerated the trend. As many more people are stuck at home, and cybercrime is growing exponentially using sophisticated techniques like AI. In fact, Juniper research shows that 2 in 5 people have been victims of fraud online.
So before it’s too late, here are 5 telling signs that you should invest in fraud prevention today.
Your Chargeback Rates Are Going Up
Chargebacks are what happens when someone claims their credit card was used without authorisation. It happens a lot to online stores, but we’re seeing fraudsters exploit any kind of vertical these days.
The fact is that if your business accepts payments online, there will be chargebacks. The problem is that these fees are very expensive. Worse, if your rates keep going up the credit card networks like Mastercard or Visa could place you on a high-risk list, which means the transaction fees will be even higher.
Referral Bonuses Aren’t Working
Are you spending too much of your marketing dollars on bonuses for new signups? Fraudsters know how to create multiple accounts to exploit that. They give themselves referral bonuses, which means you’re giving away freebies to non-existent customers.
This is a huge problem in certain industries like iGaming or online casinos. But we’re seeing more and more industries being attacked just to take advantage of the loyalty programmes, like online stores, fintechs, or challenger banks.
Your Users’ Accounts Keep Getting Hacked
Account security isn’t something to be taken lightly in the context of fraud prevention. There are a number of management and educative measures you should put in place to let users know about the value of their online accounts.
But sometimes, it’s fraudsters who are to blame for taking over accounts. It’s called an ATO or account takeover attack, and it can cause terrible damage to your company reputation. Users think they’ve been hacked due to lax security on your site, and will turn to competitors in seconds.
Too Many Accounts are From Fake Users
Every time you hear of a massive data breach, the user details end up on the dark web. This is where fraudsters can purchase them, and create multiple accounts on your website. This is a big problem if you work in an industry where you’re supposed to meet KYC requirements (know your customer).
Bad uses who use fake or synthetic IDs can incur huge fines from regulators, which could damage your business in the long run.
You’re Getting a lot of Junk Leads
If you’re working with affiliates or referral programmes, the least you should expect is that they don’t abuse your partnership. Unfortunately, bad affiliates are increasingly trying to exploit these programmes.
They will sometimes send you huge lists of leads that were actually opt-outs from newsletter sign-ups, for instance. If you’re working with a PPC (pay per click) model, the bad affiliates will use bots to replicate user behaviour and trigger a conversion on your site.