In short, the Government wants tougher rules for e-tailers to tackle the eCommerce frauds happening in India lately. Let’s look at the why and how.\u00a0<\/span><\/p>\n Certain eCommerce entities are engaging in limiting consumer choice by indulging in \u2018flash\u2019 sales. This prevents competitiveness and ultimately limits customer choice. Therefore, in its proposal, the ministry said eCommerce firms should be barred from holding flash sales in India if they are organized with an intent to benefit only a specified group of sellers.\u00a0<\/span><\/p>\n Under existing rules, eCommerce firms cannot hold inventory or sell items directly to consumers. But firms have been able to bypass this until now through joint ventures with local companies that operate as inventory-holding firms. So <\/span>the new proposal bans eCommerce companies from running their private labels.<\/span> These changes could affect Flipkart\u2019s and Amazon\u2019s business structures in India.<\/span><\/p>\n Another proposal is that eCommerce firms appoint a chief compliance officer for effective law enforcement and to ensure compliance with the new orders. <\/span>They must also appoint a resident \u2018grievance officer\u2019 to address consumers\u2019 complaints.\u00a0<\/span><\/p>\n Another new proposal requires every eCommerce entity to provide information to government agencies within 72 hours for verification of identity and cybersecurity incidents.<\/span><\/p>\n <\/b>The government said in a press release that these changes come in response to the various complaints against the unfair trade practices happening in the eCommerce ecosystem.<\/span><\/p>\n It has been increasingly hard to fix a set of rules. Here\u2019s why:<\/p>\n There are some red flags that one should keep an eye on to stop scams before they even start. <\/span>Here are 4 eCommerce frauds examples that are quite common:<\/span><\/p>\n To explain how triangulation fraud works, let\u2019s break it down into steps.<\/span><\/p>\n The worst part of this scam is that the victims don\u2019t even realize that they\u2019ve been scammed.<\/span><\/p>\n In simpler terms, this is identity theft. The fraudster obtains the identification information of the actual user and makes the online purchase on the eCommerce platform. Identity theft affects both the customer as well as the seller as the customer can place a refund request as soon as he detects the fraud. <\/span><\/p>\n Credit card fraud may be committed when a person makes online purchases from either a stolen card or when the person has taken over the account of a genuine user.<\/p>\n Ecommerce might also come from your customers, or those who claim to be your customers.<\/p>\n Chargeback fraud, also known as friendly fraud, is when a customer disputes a legitimate charge to their credit card company and receives a refund from the merchant. This type of fraud can be difficult to prevent because the customer may be taking advantage of the system.<\/p>\n Referral fraud occurs when a fraudster creates fake accounts to take advantage of referral programs to earn rewards. As an online brand, it’s important to monitor referral program activity and to implement fraud detection tools to detect suspicious behaviour.<\/p>\n Card cracking fraud involves the use of stolen payment card information to deposit fraudulent checks into bank accounts. Fraudsters may recruit individuals on social media or other platforms to provide their bank account information in exchange for a portion of the proceeds.<\/p>\n To prevent card cracking fraud, online businesses can limit the number of refunds that can be issued to a single payment card and work with their payment processor to implement fraud detection tools.<\/p>\n There always exists a high chance of online threats within the eCommerce industry. That is why we have curated 3 important points that make a good eCommerce platform for fraud prevention.<\/p>\n eCommerce customer service plays a vital role in eCommerce fraud protection. A trained customer service representative detects the fraud indicators easily and alerts the team.<\/p>\n It assists in screening eCommerce frauds that can potentially hurt your business.<\/p>\n Related Read:\u00a0\u00a0Online customer service: Tips from eCommerce business owners<\/a><\/p><\/blockquote>\n Your eCommerce store should take fraud prevention policies seriously. Fraudsters often use different methods depending on the product niche and location.<\/p>\n Your store should formulate fraud prevention policies and take necessary measures to reduce your risk. Make sure it is included in their policy too.<\/p>\n Consider a platform that personally checks each order, or delegates the task to an experienced professional. At the very least, a system should be in place with some manual verification of unusual orders. <\/span><\/p>\n Sometimes, human intuition can prevent problems from arising, which software may miss.<\/span><\/p>\n Prevention of eCommerce frauds must be your utmost priority in 2022.<\/p>\n But why?<\/strong><\/p>\n Because the eCommerce market is going to reach $111 billion by 2024 and it’s entirely at risk.\u00a0So it is important to take appropriate eCommerce fraud prevention measures to secure yourself from online threats.<\/p>\n Related read:\u00a062% SMEs targeted for cyberattacks: What you need to know<\/a><\/strong><\/p>\n Here are 3 tools that you can use to do that.<\/p>\n Signifyd<\/a> is one of the first places to look for fraud prevention software. With a scale to accommodate both large and small businesses, it runs in the backend of your store and assigns every purchase a \u201cscore\u201d based on the likelihood that its fraud. They also offer insurance on select orders, in case there\u2019s something suspicious you can\u2019t put your finger on.<\/p>\n Formerly Sift Science, the fraud prevention tool Sift<\/a> is a reliable and fully secure platform that provides 24\/7 support to its customers. It analyses the following key areas:<\/p>\n Subuno<\/a> offers over 20 fraud detection tools that analyze over 100 risk factors. It\u2019s a great choice for those who don\u2019t have a lot in their budget but still prioritize site safety. It detects fraud by automating your manual reviewing process and saves time by over 75%<\/p>\n \u00a0<\/span><\/p>\n You want to build your online store on a secure, popular platform to protect your business from these new-age eCommerce frauds. If you are on a hunt for one, look no further.<\/p>\n With frictionless, personalised, welcoming experiences, Cybersource<\/a> is reimagining payments.Real-time IP and device analysis, activity monitoring, and user authentication are used to accomplish this. There is one very important aspect of working with Cybersource: they have an all-or-nothing approach to payments and risk management.<\/p>\nProposed eCommerce changes by the MCA<\/strong><\/h2>\n
1. Ban on flash sales<\/strong><\/h3>\n
2. No more in-house labels<\/strong><\/h4>\n
3. Compliance, grievance officers<\/strong><\/h4>\n
4. Sharing information with the government<\/strong><\/h4>\n
What\u2019s behind these proposals?<\/strong><\/h4>\n
\n
5 eCommerce fraud practices to watch out for in 2023<\/strong><\/h2>\n
1. Triangulation fraud<\/strong><\/h3>\n
\n
2. Account takeover fraud<\/strong><\/h3>\n
3. Credit card fraud<\/strong><\/h3>\n
4. Chargeback Fraud<\/strong><\/h3>\n
5. Referral fraud<\/strong><\/h3>\n
6. Card cracking fraud<\/strong><\/h3>\n
Preventing fraud on your eCommerce website<\/strong><\/h2>\n
1. Customer Support for eCommerce Fraud Prevention<\/strong><\/h3>\n
2. Personalized policies<\/b><\/h3>\n
3. Carefully reviews all orders<\/strong><\/h3>\n
4 eCommerce fraud prevention tools\u00a0<\/b><\/h2>\n
1. Signifyd<\/strong><\/h3>\n
![\"Signifyd](\"https:\/\/www.instamojo.com\/blog\/wp-content\/uploads\/2021\/07\/Signifyd-1024x576.png\")
2. Sift<\/strong><\/h3>\n
\n
\n
\n
\n
![\"Sift](\"https:\/\/www.instamojo.com\/blog\/wp-content\/uploads\/2021\/07\/Sift-1024x576.png\")
3. Subuno<\/strong><\/h3>\n
![\"Subuno](\"https:\/\/www.instamojo.com\/blog\/wp-content\/uploads\/2021\/07\/Subuno-1024x576.png\")
4. Cybersource<\/strong><\/h3>\n
![\"\"](\"https:\/\/www.instamojo.com\/blog\/wp-content\/uploads\/2021\/07\/cybersource.jpg\")
<\/p>\n