Closing Gaps in the Strong Customer Authentication & Chargeback Management Processes

A loose customer authentication process can provide rogue customers and bad bots access to your system. This causes issues such as account takeovers, denial of inventory attacks, and chargeback fraud. A strong fraud management solution can keep your website safe.

Customer authentication is an important part of securing your business. It is designed to ensure that you eliminate rogue customers while letting in only genuine users. Businesses that sell online products or services are especially at risk for attacks through the use of fake customers. This can be done by a manned system or a bot.  Bad bots have now become the topmost security threat for businesses.

In 2015, it was reported that 78% of Amazon’s traffic was purely bots. Bots are phishing gurus, designed to spam and steal.

How Bot Attacks Ruin Your Business and How to Prevent Them

There are many types of damage that bad bots can cause once they gain access to your site. These include:

· Increase in new accounts that do not convert

Some eCommerce businesses offer incentives for new customers signing up. This provides a leeway for bots to set up lots of new accounts. If you notice that there are lots of newly formed accounts that are not converting, that might be a sign that your system is under attack.

To solve this problem, you need to invest in strong customer authentication solutions. A customer should undergo a vigorous process before they can create an account. This includes confirming that the email addresses and phone numbers provided are legitimate.

· Account takeover

Bots can pose as genuine account owners and take over the accounts of existing customers. These bots work by testing stolen credentials until they can access existing accounts. They then lock users out of their accounts and use them to shop. Customers who use the same password for different websites are highly vulnerable to account takeovers.

To deal with account takeovers, you should have a very strong password creation policy. Hackers can use software to crack all the possible passwords that they can use. If the passwords of your clients are short, the chances of getting hacked increase.

· Denial of inventory attacks

Inventory denial is when a bot or illegitimate user holds limited inventory in their basket and does not complete the purchase which prevents real customers from being able to purchase those items. You must not ignore this practice, also known as a hoarding attack.

Bots continue to add items to their cart indefinitely. When the system removes the item, they add them back. Check for signs of denial of an inventory attack which include increased stocks in baskets, high cart abandonment, reduced purchases, a quick reduction in inventory balances, and an increase in complaints of customers unable to obtain goods.

· Increase in chargeback fraud

Businesses are all too familiar with the issue of chargebacks and fraudulent charges. These chargebacks negatively impact businesses. It is estimated that only 14% of chargebacks are genuine.

In an attempt to prevent these issues companies, come up with return policies to streamline returns, and to help manage improper transactions. However, these policies and the issues they aim to address have become a difficult problem for businesses.

Chargeback fraud occurs when your customer orders goods and then requests a refund after receiving them. Chargeback fraud is very costly for businesses and can even make it necessary for you to increase the price of your products and services to cover the cost.

To prevent fraudulent chargebacks, you need a chargeback fraud management solution. To ensure customer satisfaction, data security, and return business, it is critical to have strong customer authentication and chargeback management solutions in place. These systems, while an investment, prevent most issues that are a result of a weak security system for eCommerce.