Fraud in commerce is called payment fraud and is basically any type of illegal or false transaction.
Ecommerce is undoubtedly the biggest part and contributor in online business. Day by day the eCommerce sector is evolving, getting more influence and growing revenues.
But unfortunately, growing revenues come with the price of increasing fraud. As of today, one of the most concerning things for eCommerce businesses is online fraud.
The biggest problem of the customer, during the placement of any order from any portal he has, pay the order amount, without getting any knowledge of their offer & policy.
Why Does the Online Fraud Take Place?
It is rather obvious that the growth of the eCommerce industry, along with the increase in payment methods like cards, online payment solutions are directly linked to the increase in frauds.
According to the report, eCommerce fraud numbers have grown rapidly over the last few years making online frauds twice the rate of eCommerce sales.
The chargeback rate is increasing near to 20% each year. The number of online shopping frauds registered with the National Consumer Helpline has jumped nearly six times from 977 cases in FY17 to 5,620 cases in FY20 till November 2019, taking the total count of cases since FY17 to 13,993.
Needless to say, eCommerce places are flooding with various reasons for fraud to take place. Here are some of them:
- The remote working scenario can help increase sales and distribution fraud.
- Third-party vendors and resales and their conflict of interest.
- Tampering with inventory management.
- Cyber fraud
- Hiring unethical employees / hiring employees without doing a proper background check.