Articles

How to Create an Account Takeover Fraud Prevention Strategy

by Kristen White Blogger

E-commerce fraud is a big problem for businesses. Online marketplaces are ravaged by fraud and theft every year, which means it is important to have a detailed fraud prevention strategy. Over time, these issues have become worse. New tools like deepfakes, synthetic identity fraud, and black markets for stolen data make it imperative for online businesses to step up their fraud prevention strategies. 

Account takeover fraud grew by 72% between 2018 and 2019. In 2019, over 5,000 data breaches led to 7.9 billion consumer records being exposed and compromised. After taking over unsuspecting customers' accounts, hackers make fraudulent orders, use existing account credits, or sell the account or account-related data. 

71% of account takeover (ATO) attacks lead to fake orders. Hence, e-commerce businesses suffer just as much as the consumer, if not more. They must bear the costs of disputing fraud claims from the consumer and lose the item they already shipped to the scammer. 

ATO Fraud Prevention: What Should the Goals Be?

Without an account takeover fraud prevention strategy, it is impossible to thrive in the current e-commerce ecosystem. These strategies need to focus on: 

· Strengthening the e-commerce platform’s foundations against common account fraud techniques.

· Collecting and evaluating the platform’s information from both fair and unfair transactions with consumers and hackers. 

· Adopting models built for today’s problems, not only traditional problems. 

More importantly, every member of the e-commerce business must understand the costs of falling victim to these types of frauds. ATO fraud leads to chargebacks, fines related to customer data security, and of course, loss of reputation. 

Creating an ATO Fraud Prevention Strategy 

Step 1: Investigate the Potential Impact of ATO Fraud 

If your business has already suffered from ATO fraud, understanding the consequences of such attacks will not be a problem for you. But if it has not yet, learn from past cases. Read about how these attacks affect customers, what they mention in online complaints, and how much time different e-commerce teams take to respond to such attacks.

Consider the cost of reputational damage in your assessments. News of ATO fraud and hacks spread fast, and merchants can lose 100% of their customers within months. After your assessments, assign a monetary value to the threats you take. That high figure cannot be your security budget. But it will remind you of what may happen if you do not have a proper security plan. 

Step 2: Form an ATO Prevention Taskforce 

Conduct all transactions with physical biometrics. Report all instances or attempts of ATO fraud to the management team and discuss them with all team members. Always be on the lookout for new and more advanced e-commerce security measures, market news, updates in platform guidelines, etc. Having a mini ATO prevention taskforce can help businesses stay updated and ready to take on new types of ATO fraud threats. 

Step 3: Invest in the Best Tools

Use the latest retail fraud 3rd-degree prevention tools that come with machine learning and artificial intelligence (AI) features. These tools can spot unusual consumer behavior and automatically block suspicious accounts and users. These tools improve over time and can keep e-commerce platforms consistently safe from ATO fraud threats.


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About Kristen White Committed   Blogger

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Joined APSense since, August 19th, 2016, From Chicago, United States.

Created on Feb 19th 2021 00:59. Viewed 356 times.

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