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Is the Rising Prevalence of Online Fraud Threatening Your Ecommerce Business?

Online fraud is a growing concern as more people shift their lives online. Louis Columbus from Forbes talked about the extensive problem with Internet fraud in response to the growth in online commerce. He cited a recent paper that found online sales increased 126% between April 2019 and April 2020. As e-commerce demand grew, Internet fraud rose proportionately. 

This underscores the need for fraud prevention solutions. However, many e-commerce companies fail to invest in them. 

If you own an online store, then you will likely find that Internet fraud is a growing problem. One analysis found that Internet shopping scams have grown at a rate of 30% each year. PwC found that total losses from fraud amounted to around $42 billion in 2020 so far.

Unfortunately, online fraud can be severely detrimental to the success of your e-commerce store. Whether the fraud is directed at your business or customers, the consequences can be crippling if you don’t take the right preventive measures. 

Here are some tips to protect your online business. 

Learn about different social engineering strategies that online scammers use 

If you watched movies like War Games and Hackers back in the 1980s and 1990s, then you might have an unrealistic understanding of modern computer crimes. In 2020, it is rare for hackers to rely entirely on brute force attacks. While they still use tools like dictionary password crackers, these are becoming less common as more people understand the importance of choosing strong, random passwords.

Instead of using brute force strategies, they tend to rely more heavily on social engineering attacks. Some of these scams target consumers, as we see with Black Friday scams. However, others are directed at online stores themselves. 

They will find clever ways to dupe you and you are employees into handing over sensitive information, such as financial data or login credentials. 

You need to understand how these social engineering scams work. They often involve the criminal pretending to be an employee of a web hosting company, financial institution or third-party partner to solicit sensitive information.

Some information, such as your password, will never be requested by the company they are pretending to be working with. Companies like PayPal warn people about this and alert them about their support policies after being advised that scammers are impersonating them. 

Your company will be less likely to fall victim to the scams if you know the telltale signs. 

Always use HTTPS connections for your website 

You should make sure that your website is properly encrypted. This is going to make it much less susceptible to hackers. 

There are a lot of things that you can do to improve the encryption on your website, but the most important thing is to simply make sure that you purchase a security certificate with your hosting plan. The certificates usually cost about $10 a year, which is an excellent investment for your security. 

Keep in mind that hackers have to weigh the potential payoff from a scam against the amount of work involved. It takes considerably more effort to successfully crack the security of a website using an HTTPS connection, so they are unlikely to put in the work unless it is a very lucrative target. 

Even if you will never be the victim of a hacker, it is still prudent to have an HTTPS connection. This sends a message to your customers that you take their data privacy very seriously. Google and other marketing platforms also are starting to require encrypted connections as well, so you might seriously limit your ability to get traffic if you don’t use one. Finally, many jurisdictions are imposing stricter data privacy laws that require encrypted connections. 

Always use the most recent version of your CMS 

CMS providers routinely discover new security holes in their software. This is hardly surprising, since even companies like Instagram discover security problems. They release regular updates to patch them. You need to make sure that you are regularly updating your CMS to keep it as secure as possible. 

Be cautious about downloading new apps, modules or plug-ins 

Open source CMS providers and e-commerce companies are regularly developing new plug-ins and tools for their users. As an e-commerce business, you will find a lot of great benefits of using many of them. 

Unfortunately, they often have unacceptable security flaws. You need to do your research to make sure you are only downloading trusted programs that won’t compromise the security of your website. You should look at independent ratings and find out if other people have raised concerns about any program before downloading it.

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