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How not to get caught by the nets of fishy e-commerce scams

E-commerce scams are now found everywhere online, and as we live in an age where the majority of us prefer online shopping rather than walking into a store, we should educate ourselves about the online scams that are so prevalent to avoid being scammed. An e-commerce scam is an online scam that occurs on a website requires you to input personal and payment-related information.

Gone were the days where a physical credit or debit card was required to commit fraud, technology has advanced far enough that all a fraudster needs to commit the online scam are you inputting your details in a webpage. E-commerce scams do not only affect consumers who make purchases online, but they also impact companies who sell products online.

1. Clean Fraud

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There’s nothing clean about this online scam; a clean fraud occurs when defrauder uses someone else’s credit or debit card details to make a purchase. The fraudster would have most likely obtained the card details using unsavoury means and would also have detailed personal information of the person who is being scammed. A merchant would not be able to stop a card payment from going through if the fraudster has all the required details needed to make the payment.

There are some tips you can follow to protect your personal and card information when you shop online. First off, try to use a credit card instead of a debit card as a credit card has more security features and better fraud protection. Always check for a “https” connection, this should be a secure connection, and valid security certificates should be present. If you are purchasing anything on social media, completely avoid sharing your card or personal information as social media platforms are not secure sites to process payments.

2. Account Takeover Fraud

Account takeover fraud is a variation of identity theft that happens when someone gets access to another person’s bank or e-commerce account using bots. Aside from using the online account to make fraudulent transactions, the fraudster can put the victim’s personal information up for sale on the black market or the deep web. 

To protect yourself from account takeover fraud, have different passwords for the various accounts you have set up online; this would make it difficult for a fraudster to take over all your online accounts fully. Ensure that you have secure virus and firewall protection when you are online as fraudsters use bots to mine for information and be wary of giving out your email address.

3. Merchant Identity Fraud

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Fraudsters love mining for data, that is the bread and butter of e-commerce scams and what better way to obtain information than masquerading as a legitimate merchant? Merchant identity fraud happens when a scammer sets up fraudulent merchant accounts after they have successfully stolen a legitimate e-commerce’s business identification. After the setup of the false business is done, the site then functions to obtain credit card details and personal data while also charging funds out of cards. When sufficient money has been stolen, and with enough data being mined, the fraudster would then close the fake business site, leaving the legitimate business to deal with the complaints, revenue loss and damaged reputation. 

Merchant identity fraud is very hard to spot as the scammer would try to set up a site that would look like the real thing. It is best always to be cautious when you’re online shopping, keep an eye for quirks; if the site has too many great reviews or too little reviews. If anything strikes you as suspicious, it’s better to follow your instinct and not proceed to give out any personal information.

4. Advance Fee Scam

One of the most popular online scams that were created, this scam had entrapped millions of people online when it first surfaced. This sort of scam is also known as a confidence trick where the fraudster promises the scam victim a large amount of cash or product in return for a smaller amount of advanced payment. 

There are quite a few variations of this scam, one of the most famous one is known as the Nigerian Prince Scam. This scam can take almost any shape and form and is quite versatile; it can be found almost anywhere online from websites to social media platforms.

It’s relatively easy to spot this scam due to it being so famous, there is generally an offer that is too good to be true that would be designed to act as bait, and the scammer would be very responsive to queries. Once you receive any requests to make upfront payments, you should immediately cease contact with the scammer and if it’s possible to report the site or person you should do so to avoid the scam to entrap other people.

5. Friendly Fraud

Don’t let the name deceive you; there’s nothing remotely friendly about this type of e-commerce scam. This scam is slightly different from the usual scams as this e-commerce scam is done from customer to the merchant. Otherwise known as a chargeback scam, this fraudulent e-commerce activity occurs when a user makes an online shopping buy with a valid card then requests for a chargeback or refund from the bank after the purchased products have arrived.

The rise of e-commerce and online shopping has seen the growth of sort of fraudulent scam and many merchants suffer from loss of revenue due to this. If you own your own e-commerce store, try to use proper authentication software for your payment gateway even if it costs a little more than standard software. Setting up secure tracking systems for the delivery of your products is also a good way to protect yourself from friendly fraud as you would have irrefutable proof of the goods being sent as per the orders.

To find out more about prevalent scams in Malaysia and Singapore, you may also download our free e-book called “Get Thee Behind Me, Scammers!!” from these link below:

Malaysian Version

Singapore Version

After all, prevention is better than cure. Arm yourself now with knowledge and caution, rather than to regret it later.


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