August 22, 2022
Macropay Scam Alert: Popular Financial Scams

The rise of e-commerce demand pushed all kinds of merchants, big or small, for setting up online storefronts. However, the digitization also enabled scammers to easily target consumers and merchant platforms. This Macropay scam alert will elaborate on the type of payment scams and discuss ways to prevent them.

The movement restrictions of Covid-19 around the world pushed people to spend more time online, which, in turn, exploded e-commerce and online payment scams.

Regulators across Europe and other countries are alarmed by the rising financial scams, especially payment frauds. Britons lost more than £1.3 billion in 2021 to financial frauds and scams, while over AU$2 billion siphoned off from Aussies.

The global loss from e-commerce platforms for last year alone is estimated around $20 billion, growing 14 percent from the prior year.

Popular Financial Scams

Fraudsters pull off all-kind of tricks to siphon money from consumers and merchants. Many involve scare tactics and trickery, while some apply a higher degree of technology by hacking into the systems.

Some of the notoriously popular financial and payment scams are:

Identity Theft

Identity theft is one of the usual payment frauds encountered over the years. One in five Europeans has become a victim of some kind of identity fraud, and the number skyrocketed with the effects of the pandemic in people’s social life.

Scammers often use persuasion and sometimes scare tactics to gain the personal credentials of consumers. Phishing is another popular way to gain such information. Fraudsters use these information to generate credits on behalf of the victim.

Identity fraud comes in all forms: credit card fraud, bank fraud, utility fraud, and many more. The most common one seen in recent years is synthetic fraud – fraudsters gather pieces of information about the victim and create a fake online persona to open a credit line.

Card-Not-Present Fraud

Card-not-present fraud is another type of identity fraud but specific to stolen or lost credit or debit cards. Fraudsters use stolen credit card credentials often gathered with phishing attacks or other means like skimming and PIN capturing devices.

It is also one of the oldest frauds that started with the mainstream use of magnetic cards. Industry research puts the total loss of $130 billion to card-not-resent frauds between 2018 and 2023.

Friendly Fraud

Despite the name, these types of fraud are not friendly at all. These frauds, also known as refund or chargeback frauds, directly impact the merchants.

The modus operandi of friendly fraud is to make a legitimate purchase on an online platform. After receiving the goods, the fraudster claims to the bank or credit card issuer that they never received the order, thus initiating a refund or a chargeback. It enables them to receive the goods without paying any money.

This type of fraud became rampant recently as around 40 percent of merchants globally reported to be the victim in 2021.

Man-in-the-Middle Fraud

Man-in-the-middle or payment interception fraud is a much more technically-advanced technique. Fraudsters usually hijack an ongoing transaction using malware to divert the payments to malicious platforms. These attacks are often large-scale and compromise a significant portion of payment infrastructure.

Platform Takeover

Platform takeovers are another hacking tactic but confined to a particular online store. Hackers often pull off such takeovers using malicious plugins and other tools used for website building.

These platforms often result in diversion of payments to accounts controlled by malicious actors, along with the theft of customers’ details and even credit card and other payment credentials.

How to Avoid Payment Scams?

Despite the risks of payment fraud, merchants cannot afford to shut their online storefronts. Fraudsters also innovate their tactics frequently, and there is a full-proof solution to avoid them.

However, merchants can always use better technological infrastructure to minimize fraud risks. Using a reliable payment gateway can significantly increase the protection against online payment fraud.

The advantages payment gateways bring to tackle such frauds and scams are:

  • Real-time payment data feed
  • Refund and chargeback protection for bogus disputes
  • Secure infrastructure to prevent interceptions
  • Up-to-date security plugins
  • Strict data protection rules

Macropay: A Reliable Payment Gateway

Macropay offers an end-to-end payment gateway for merchants. We focus extensively on security and offer the best cybersecurity protections for payment infrastructure. We also have a dedicated tech team that actively improves our cybersecurity to tackle the changing tactics of fraudsters.

Reach us at [email protected] to know more about our services.

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