In 2017, fake online hotel booking scams reportedly cost consumers nearly $4 Billion. More than a drain on users, these losses impact the margins of hotels themselves.
If you happen to be scammed, they’re less likely to spend much on your next holidays. This symptom is all part of a larger trend in the cybercrime sphere: fraudster attacks on a growing range of verticals. While certain industries remained relatively unscathed until recent years, it seems these days nobody is safe from online fraud. However, three types of companies are particularly susceptible to attacks.
1 Are you a merchant storing high resale value items?
If you go to Amazon.com and have a quick look at the priciest things you can order, most of them are in high-end electronics. Apple products, computer hardware, GoPro cameras or cutting-edge TVs are all in high demand by scammers.
Why? Because buying a kitted-out Macbook Pro ($2,385.95) with a fake credit card and selling it back for half the price can bank you as much as selling 10 smaller items. This is why, according to a report breakdown by MarketWatch, luxury goods and electronics are at the top of the list of most-bought items by fraudsters.
A bit further down the list, you’ll find products such as Best Buy gift cards, iTunes vouchers and World of Warcraft gold. In short, digital goods and gaming goods, but also airline tickets and accommodation bookings.
Finally, it is interesting to note that fraudsters also target business services such as hosting services, logo and web design, and even legitimacy-boosting tools like search engine optimization services and coupons for Facebook ads.
2 Does your business operate as a digital wallet?
The good news for P2P (peer-to-peer) payments is that BI Intelligence expects mobile P2P to rise to $336 Billion in 2021. The bad news is that these business models are increasingly targeted by fraudsters.
As an elegant and simple alternative to cards, a digital wallet also means accessing real funds that are only protected by a password. Fraudsters are increasingly cunning when it comes to securing these passwords, whether it is to access P2P transfer accounts, cryptocurrencies, or any marketplace with a deposit and withdrawal option.
According to a report by Gallup, a leading corporate analytics firm, more than 55% of users are still on the fence about digital wallets due to safety concerns. Specifically, users do not enjoy the fact that they might become target of phishing attacks in order to secure their passwords.
3 Do you give generous promos or bonuses?
Promotional offers are a fantastic way of attracting new customers. From free trials to opening discounts, they provide a strong incentive for users who are still undecided about signing up to your offer. In theory, every business should use them.
Sadly, fraudsters are adept at finding loopholes and strategies to abuse these offers. If we take the example of a Uber-type service, chances are it offers a free ride to new users. But if fraudsters can multiply accounts to continuously ride without spending a dollar, everybody loses. The company and driver runs at a loss, and there is an opportunity cost where other users cannot find free taxis.
Similarly, referral fees and affiliate payouts are also a strong target. Continuing with our ridesharing example, if you get a bonus every time a friend signs up, you ought to place a limit on the amount of new accounts that can use the link. Fraudsters certainly have the means, time and incentive to create hundreds or thousands of accounts in order to abuse your generous offers.
Are You a High Fraud Target? – Final Thoughts
Companies and fraudsters are in a constant game of cat and mouse. And the latter will leave no stone unturned when it comes to extorting funds from your business, whether it’s in the form of freebies, actual currency or physical goods.
As fraudsters become more organized and benefit from larger resources (forums, funds, darknet websites), it is important to implement strong fraud-prevention strategies. This is true regardless of the size of your organization or the value of what you offer.
At SEON, we cover numerous verticals, combining powerful machine-learning tools and manual fine-tuning to ensure you can detect, prevent and drastically reduce fraud attacks.