We keep hearing about data breaches, hackers, and cyberattacks. And as everyone is online today, these attacks are becoming more and more common. Are you curious about the types of cyberattacks and frauds that can happen?
Maybe you want to know more about the most vulnerable groups online. Or do you just want to learn about current statistics when it comes to online payment fraud? You’re in the right place. Here, we will cover everything you need to know about online fraud, as well as how to avoid becoming the next victim. So, let’s start from the beginning.
Link Between Technology and Frauds
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Technology keeps improving by the day, and it affects every single aspect of our lives. At the same time, new technology is prone to fraudulent activities. People have yet to learn about what it has to offer, and there are those who are looking to exploit the situation.
A few decades ago, no one could have expected that the internet would become huge. But at the same time, there were those who were looking to abuse the new market and trick as many people as possible.
Today, most people are aware that scams are common online. They know not to click suspicious links, and it only forces cyberattacks to evolve. At the same time, there are many vulnerable groups that these cyberattacks will target.
But what does it mean for businesses and customers online? How does it affect people, and are losses significant? Anyone can be a target of a cyberattack. But if you are aware of the most common methods, it will be easier for you to avoid making the same mistake as other people.
People are learning to be more careful online, but there are other ways to prevent fraud and lower the chances of being a victim of a scam. So, the more you learn about scams and potential cyberattacks, the more likely you are to avoid them.
Different Types of Frauds
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There are many different types of fraud, and they have different goals. Some aim to get sensitive information, while others will steal money. The most common types of fraud you can encounter online are:
- Phishing – Phishing is a scam where an individual will try to trick someone into sharing sensitive data. This could be emails, login credentials for a website, bank details, and so on. Based on the type of info, they could steal money, affect their reputation, or anything else. It is crucial to keep private data private. There is no reason for you to share your login credentials with anyone, especially with strangers online.
- Data breach – Data breach is one of the most common ways to affect a business. This term refers to a breach of security, and hackers will usually obtain sensitive data. Improving security is one of the best ways to lower the chances of something like this happening in the first place.
- Malware – Malware is short for malicious software, and the goal is to obtain sensitive data, or personal information, or cause harm in any other way that will affect the user or a company.
- DoS or denial of service – Denial of service means that someone will prevent an individual (or a group) from accessing the service, network, or website.
- BEC or business email compromise – With BEC, the primary target is companies, and the idea is to trick them into submitting an unauthorized payment.
- Ransomware – Ransomware is similar to malware, but the victim will be forced to pay to get access to personal data or sensitive info.
And each of these types is relevant today.
Online Payment Fraud Statistics
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One of the main targets in the past few years is e-commerce platforms. Total losses thanks to online frauds in 2020 were 17.5 billion, and the number kept increasing each year. Today, there are over 48 billion dollars in losses thanks to online fraud. For reference, total losses were nearly 10 billion in 2011.
Countries that are the most affected in Europe are France and Germany, while North America accounts for 42 percent of total losses for 2023. The main reasons behind these numbers are data breaches and stolen credit cards.
When it comes to specific trends, the fastest-growing e-commerce fraud is the abuse of promotional activities. Promo fraud and loyalty program fraud are both on the rise, and it is a global issue. As more and more people move to shopping online and using e-commerce platforms, we can only expect these numbers to grow even further.
The next issue on the list is the so-called friendly fraud. Approximately 61 percent of all chargebacks are in this category. A customer will buy a product online, only to dispute it with the bank. The result will be the chargeback. And it is causing over $60 billion in losses.
All of these scams force companies to spend nearly 10 billion on fraud detection each year. And since most people have access to the internet and shop online, online frauds contribute to nearly 60 percent of all frauds globally. Online frauds are followed by mobile spam calls (less than 20 percent), door-to-door sales (12 percent), and postal mail (11 percent). In-store frauds are least likely with around 5 percent.
What Can You Do?
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Cyberattacks and scams keep evolving. And there are only a few things you can do to avoid being the next victim. Firstly, you need to be careful. As mentioned earlier, you should never share any personal details with people online. Customer support should never ask about your password or any similar details. You can also enable 2FA or two-factor authentication, which will add another layer of protection for your account.
Furthermore, investing in security is never a bad idea. Especially if you are running a business. There are so many incredible ways you can prevent the worst-case scenario, but the key is prevention.
For e-commerce platforms, one of the simplest ways to invest in fraud prevention is to check out the API developed by ReactivePay. It offers both fraud prevention and payment monitoring, you can adjust additional settings, it offers machine learning, and so much more.
Having an online presence can be a wonderful thing. But it can also be dangerous. Nothing is stopping companies in the U.S. from being attacked from any place in the world. Unless they invest in cybersecurity as soon as possible.