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Behind The Scenes - Online Fraud

You’ve just put your new website live and you are watching the sales roll in…Then you wake up and smell the coffee. In all seriousness the sales might roll in and I genuinely hope that they do but if they do or they don’t you have to be prepared for fraud when they do arrive. I am not sure of the exact percentages, but I’m confident that 99% of customers that will place orders on your website will be genuine customers, but you will without doubt encounter fraud sooner or later.

After all the excitement of your website going live this excitement is only eclipsed when your first sale arrives, it’s the equivalent of scoring a penalty against all the naysayers! However not all the orders you receive will be genuine orders and you need to be extra vigilant. This isn’t to say you can’t trust customers but you need to be prepared for the 1% minority.

When our website went live we had basic automated fraud checks attached to the store which literally categorised orders as low risk, medium risk or high risk. If it was low risk we would send the order, medium risk we would require proof of identity and if it was high risk we would cancel the order. From the start all orders we sent required a signature and were tracked, initially this was so we could offer the excellent customer service we pride ourselves on, but this is also priceless when providing evidence when you are the victim of fraud. It is quite normal for shipping addresses to be different to billing addresses so if an order is categorised low risk why wouldn’t you send it? Well if anybody reads this I hope you don’t find out the hard way like we have.

As soon as fraudulent activity is reported on a bank account the bank immediately take the money from the businesses bank account and you are charged a £10 admin fee for the privilege so not only have you lost your stock but you have lost the potential profit you could make on the stock and you are charged £10 to do so - It’s the equivalent of shoplifting for an online business. As a business that prides itself on honesty and integrity this is the last thing we want to happen because an innocent person will now need to go through a lot of distress to cancel their bank accounts and no doubt be without money for a considerable amount of time, I know this as I was a victim of fraud personally.

So, what do you do? Once you receive a chargeback from the bank you can at this point report it to action fraud who will give you a crime number and investigate the fraudulent activity very thoroughly, but the damage has already been done to the innocent person and to the business. As a start-up business you simply cannot afford to leave yourself wide open or your start-up won’t ever get beyond being a start-up. We therefore found the best fraud protection software available and this was added to our store in addition to the basic fraud checks that were already attached to the store when we went live. Since we have had the new protection added we have dispatched zero fraudulent orders (touch wood) but we won’t become complacent with this as once bitten, twice shy. Hopefully us being extra vigilant enhances the trust for 99% of people that visit our store :)

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