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3 Tips on How to Spot Online Payment Fraud during Holiday Shopping Season

December 2020 by Marius Galdikas, CEO at ConnectPay

This year e-commerce will have to handle most of the holiday shopper traffic. With digital payment fraud on the rise since May—when the majority of countries simultaneously went into lockdowns—the end of the year shopping is not without worry as well, since fraudsters are looking to take advantage of inattentive gift seekers.

Payments expert Marius Galdikas, CEO at ConnectPay, has shared a few telltale signs, which will help buyers remain vigilant and more easily identify attempts at payment fraud.

Phishing for personal details

Phishing for highly sensitive data is not something new in the fraudster’s bag of tricks. However, this year they have leveraged the boom of courier services to give it a new face. Scammers target eager shoppers by sending out false e-mails, claiming to not have the right personal details to complete the delivery. Instilling a sense of urgency, they demand to update the information and often, even provide payment for the delivery, this way luring out sensitive details as well as funds of unaware buyers.

“Anyone asking for too much information should be an instant red flag in any scenario,” said M. Galdikas. “As for identifying similar threats, it is smart to look for personalization, or rather the lack of. Since such e-mails are sent in bulk, “Dear Sir/Madam” greetings are some of the ones most likely to be used. The content of the message tends to be quite vague, too.”

“Bookmarking the correct page URLs of the most used services could also help avoid such cases, especially if you are someone who often does not look twice at the web address – a typo could easily slip through,” he added.

Requesting gift card payments

Another common attempt at theft is asking for payments solely through gift cards. In the United States alone, scams involving gift and reload cards amounted to $79.9 million of lost funds throughout the first three-quarters of 2020. Although consumers are now more careful in giving out their credit card details, gift cards do not trigger the same response of cautiousness, making it one of the quickest ways to lure out money as the theft is almost instant.

“They are no exceptions for gift cards to be used as payment. That said, many fall victim due to the false sense of urgency, leaving no time for the consumer to take a step back and re-evaluate the offer,” explained Galdikas. “Once the deed is done, there is no way to remediate the situation – the gift card funds are quickly spent or sold. So the best preemptive measure is to not put yourself in such a position in the first place, conduct payments online where you can clearly see what payment partner the retailer uses. It is smart to research the payment provider as well, to eliminate any doubts of legitimacy as to who will be handling your hard-earned money.”

Fraudulent charity calls

The holiday season encourages many to help those most in need. However, fraudsters are prone to abuse these good intentions by imitating charitable organizations and taking possession of the donations. The usual giveaways of such scams are the use of overly aggressive language, as well as the urgency to conduct the transaction.
“Healthy skepticism and verifying all the information about the organization remains the best measure against fraud. That said, credit cards have several layers of security, thus making donations via cards makes it more difficult to exploit the donors," he explained. While the payments sector is continuously trying to refine security safeguards against fraudulent activities, the consumer has to be aware of the possible threats as well, especially during the holiday season.
“Second-guessing suspicious details should be at the top of the mind of every shopper, as even the most robust preemptive measures may be rendered ineffective if consumers do not take time to question who will be handling their funds,” concluded Galdikas.




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