How to Prevent Your Business from Being a Victim of Fraud

As technologies progress and new ways of facilitating online purchases and transactions are born, so do new kinds of robbery and fraud arise that seek to affect users and owners of brick-and-mortar stores or online businesses.

These actions look to take advantage of the ingenuity of internet users and request their personal or financial data, or that of their relatives, to steal it.

There are multiple fraud modalities and trends that evolve with technologies and devices. As they are perfected, the range of victims grows. That is why it is very important that all users apply preventive measures, and that online stores and businesses offer safe platforms to their customers.

In this sense, all those involved (stores, consumers, card brands, issuing banks) must apply security measures and be up to date with protocols and requirements to provide a transparent and effective service.

Here we will tell you the most common types of fraud and how you can prevent your business from being a victim of it and protect your profits and the safety of your clients.

Types of Fraud


There are several types of fraudulent transactions that are made on the Internet, the most common ones being scams, identity theft, and invasion of accounts.

1. Scams

According to the Royal Spanish Academy, scams are crimes that cause patrimonial damage to someone through deceit and implemented for profit. In the case of online scams, the scammer deceives and benefits from stealing financial information from other people. (For example: selling such information and profiting off it or promising a product and never delivering it).

The most common online scams are:

  • Donations to charities or false organizations:

    Through social networks or profiles on crowdfunding pages.

  • Sentimental deceit:

    Through appointment apps or false profiles seeking to establish a relationship with the victim to ask for data or money.

  • False job offers:

    They usually offer a very well-paid position without required experience, and the sender of the email is usually unknown and suspicious.

  • Business opportunities:

    They offer you investing in a business, franchise, or product to make money quickly.

  • Online surveys:

    They appear as ads that take you to a website in which they request your phone number to fill out the survey. By providing your phone number, you subscribe to a messaging service in which you pay for receiving online advertising.

  • Fake viruses:

    A banner warns you of a false virus and takes you to the download page of a software that promises you to delete that virus from your computer.

2. Invasion of accounts

According to Shieldsquare, an invasion of account, also known as account takeover, happens when someone steals the identity of a person and makes movements in their bank accounts.

In account takeovers, a scammer uses bots illegally to obtain access to the bank, the e-commerce site, or other types of accounts of the victim. This attack leads to fraudulent transactions and unauthorized purchases from the victim’s account.

3. Identity theft

These are individuals who create a false identity to deceive other people and obtain financial benefit.

Identity theft occurs when someone uses another person’s information, such as your name, identification numbers, credit card numbers, Social Security number, driver’s license number, bank account numbers, credit card numbers, personal identification numbers, electronic signatures, fingerprints, passwords, or any other information that can be used to access financial resources.

Modalities of Identity Theft

When we talk about identity theft, we mean several forms at work. Among the most popular we find:

  • Phishing

    It is the theft of data through emails. Its operability is based on sending false web page links that are similar to sites that the user frequents, that is, they create a replica of the website for users to enter their personal data and thus obtain such data.

  • SMShing

    It is the theft of data through text messages or SMS. It is a scam in which, by means of messages, data is requested, or users are requested to call a number or go to a certain website.

  • Vishing

    The term is a combination of the English “voice” and “phishing.” It is the theft of data through telephone calls. The conventional telephone line and social engineering are used to deceive people and obtain financial information or information that is useful for identity theft.

These modalities of fraud and identity theft are very effective because they identify vulnerable people, older people, or social groups that are more likely to trust or fear figures of power.

Users can mitigate these types of acts by applying the following measures:

  • Avoid calls where data is requested.
  • Validate who writes or calls from entities or banks.
  • Report suspicious emails as spam.
  • Not answer messages or suspicious emails.
  • Not pick up and block unknown numbers.
  • Not provide information if you do not know the origin of a call or email if sensitive data is being requested.

Malwares to Obtain Information:
Malwares are systems that are installed on computers to steal information. To avoid them, users must ensure that they:

  • Buy on websites with safe links.
  • Scan and use antivirus software that provides security to navigate.
  • Use updated operating systems.
  • When paying at a physical store, do not lose sight of your card.
  • When buying on the Internet, do not store information in stores.

How to Prevent Your Business from Being a Victim of Fraud


3D-Secure Protocol

3D Secure (or 3 Domain Secure) is a safety protocol that aims to prevent fraud in online transactions made with credit or debit cards through the authentication of the identity of the buyer. It is also called Payer Authentication.

3DS is the global trend to reduce electronic fraud. In Europe it is the main form of being compliant with the Payment Services Directive (PSD2) effective since the end of the year 2020.

The name of 3DS (Three-Domain Secure) comes from the participation of three (3) essential entities in electronic transactions: the acquiring bank, the issuing bank, and the credit card company.

This protocol is one of the most advanced and effective options to prevent fraud worldwide. So much so that in countries such as Ecuador, where Evertec implemented its payment platform more than two years ago, an authentication rate of 91% is evidenced without exposure to countercharges, for the benefit of banking entities, businesses, and users.

Some of the benefits of 3DS are:

  • Shops are not responsible for fraud, in this case the issuing bank responds, provided that the user has been authenticated.

  • Reduction of electronic fraud.

  • Improvement in the experience of the credit card holders.

  • It facilitates management to issuing banks, giving visibility of online operations.

  • Reduction of declination rates of electronic transactions.

  • Decrease in the number of steps a person must take to make a purchase.

  • It offers extra safety guarantees to businesses and users.

  • Risk levels can be established.

  • Lowers costs of investigating fraud and of reissuing cards.

Detection and monitoring of risks against fraud

Tools such as Evertec RiskCenter 360TM serve to control risks and maintain full visibility on transactions and payments and see where the faults are in order to mitigate them; it even integrates with the 3DS protocol to work on a mixed strategy that allows combining monitoring and prevention techniques.

This tool also allows analyzing customer behavior and transactions, anomalies, and used channels. This is complemented by artificial intelligence models or data prediction.

Platform capabilities for detection and fraud monitoring:

  • Monitors events and detects suspected patterns for different means of payment, including transactions with card present or not present

  • Analyzes real-time events and close-to-real in multiple channels and payment devices, such as points of sale (POS), ATMs, and e-commerce, among others.

  • Sends notifications to cardholders through multiple channels.

  • Analyzes and documents outcome of cases of suspected fraud according to the investigation of the corresponding alerts.

  • If necessary, blocks cards, accounts, terminals, and businesses, among others, preemptively or permanently.

Having a system such as RiskCenter 360 assists financial institutions in complying with the requirements of regulators, requirements of providers, and other industry norms and standards. It also offers the ability to differentiate themselves before their clients by having a 360° monitoring vision that allows them to have a unique scope of their clients and their relationship with the institution and involves them in the process of monitoring and detecting fraud in an accountable manner.

This system also facilitates monitoring and analyzing non-financial events such as changes of direction, data updates, or others that may be ignored by other tools since they do not necessarily have financial value.

Additionally, it has a user-friendly rules management console, a very powerful engine that allows the inclusion of a wide variety of sources, and variables to offer a truly comprehensive analysis.

Avoiding becoming victims of these types of acts depends on ourselves and our self-care. When buying online, make sure that the website is safe and that it has a secure and transparent payload of payments.

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