In today’s digital age, e-commerce businesses have become lucrative targets for scammers that are looking to steal sensitive information and money from businesses. According to the Federal Trade Commission (FTC), the rise in these scams has resulted in online businesses worldwide losing billions of dollars. 

One of the most popular forms of fraud that e-commerce businesses are susceptible to is payment fraud. This happens when scammers exploit vulnerabilities in transaction processes. They may use stolen credit cards, conduct chargebacks after receiving goods, or engage in identity theft. Gina Ramsey, Founder of Pink Dog Digital, shared her recent experiences with online scammers and how she works to safeguard her business from future attempts.

Pink Dog Digital, a marketing and advertising agency, receives numerous online inquiries. Ramsey, Founder of Pink Dog Digital received a recent inquiry from a consumer requesting marketing services. Once more information was provided by the Pink Dog Digital team, the consumer then requested a proposal. After signing and accepting the proposal, the consumer then stated that they would pay Pink Dog Digital in full, but the agency needed to send a payment to an outside consultant. At that moment, Ramsey knew this was a scamming attempt.

 “You have to send a check to the scammer’s “consultant” for the work they did on the logo [or whatever materials] and the minute you pay the consultant, they dispute the credit card charge and you are out of the money,” says Ramsey. This happens to many e-commerce businesses.

As an e-commerce business owner, it is crucial to be proactive and stay vigilant in protecting your business from online scammers. “If anyone is asking you to pay someone else, it is a scam. Also, if a potential client wants to avoid talking on the phone or meeting, this is a red flag for a potential scam” Ramsey warns. Here are three more tactics of e-commerce fraud and ways to avoid them:

  1. Phishing attacks

Phishing attacks are a common tactic scammers use to deceive people into sharing sensitive information. Educate yourself and your employees about spotting suspicious emails, avoid clicking on unfamiliar links, and strengthen email security to reduce the risk of falling victim to these scams.

  1. Fake websites and cloned stores

Beware of fake websites and cloned stores created by scammers to trick customers into sharing their payment information. Monitor your brand’s online presence for unauthorized duplicate stores or websites. Direct customers to purchase from your official website and stress the importance of verifying SSL certificates and secure payment gateways.

  1. Vendor and supplier scams

Protect your e-commerce business from vendor and supplier scams. Thoroughly research potential partners, request references, and verify their legitimacy through reputable channels. Maintain clear communication channels and exercise skepticism when approached by unfamiliar suppliers.

Safeguarding your business against online scams is crucial for maintaining customer trust and protecting your bottom line. If you suspect that you are the victim of an online scam, contact your local Better Business Bureau or report this scam through the BBB Scam Tracker to help protect other e-commerce businesses.