Your second step to fraud prevention mastery
Bruce Bird
Technology senior leader, risk and compliance advisor, innovator, analysis-driven decision maker, fraud prevention leader, management consultant
FIR Risk Tuesday edition 29 explores cyber fraud risks relevant to e-commerce merchants. In our last newsletter, we shared a summary of NIST CSF 2.0 framework applied to an e-commerce business as your first step to fraud prevention mastery. This week we dig deeper into risks by common business domains and processes to align your risk assessment both to a reliable framework and to processes that are at risk to cyber fraud. Building awareness internally is critical to a successful cybersecurity program, FIR RISK provides expert guidance and practical solutions to safeguard businesses against cyber threat actors.
BIG PICTURE
Fraud Attack Rates: U.S. e-commerce merchants faced around 1,200 fraud attacks monthly in 2022, with about half resulting in successful incidents. This figure highlights the need for robust fraud prevention, especially during high-demand seasons.
True Cost of Fraud: For each dollar lost to fraud, businesses typically incur $3.75 in total costs, including recovery, mitigation, and chargebacks. This was highlighted as a substantial burden on businesses, emphasizing the hidden costs of fraud incidents.
Cyber Fraud Risk Register for E-commerce
Payment Processing Vulnerabilities
Risk: Compromised Payment Systems
? Outdated or non-compliant payment gateways susceptible to attacks
? Insufficient encryption of payment card data during transactions
Risk: Payment Fraud
? Unauthorized transactions using stolen credit card information
? Chargeback fraud from fraudulent refund claims
Account Security Vulnerabilities
Risk: Account Takeovers
? Weak authentication mechanisms allowing credential stuffing attacks
? Lack of multi-factor authentication for user accounts
Risk: Fake Account Creation
? Insufficient verification processes for new account signups
? Bot attacks creating multiple fraudulent accounts
Website and Application Security
Risk: E-commerce Platform Vulnerabilities
? Unpatched security flaws in e-commerce software
? Insufficient security testing of custom-developed features
Risk: Cross-Site Scripting (XSS) and SQL Injection Attacks
? Inadequate input validation and sanitization
? Exploit web application vulnerabilities to steal data or manipulate transactions
Risk: Website Availability Disruption
?????????????????Distributed Denial of Service (DDoS) attacks overwhelming servers
?????????????????Loss of sales and customer trust due to website downtime
领英推è
Social Engineering and Phishing
Risk: Customer Phishing Attacks
? Fraudulent emails or websites impersonating the e-commerce business
? Social engineering tactics to trick customers into revealing login credentials
Risk: Employee Phishing
? Targeted attacks on employees with access to sensitive systems
? Business email compromise leading to fraudulent transactions
Promotion and Coupon Abuse
Risk: Automated Coupon Harvesting (Bot Attacks)
? Bots systematically testing and applying all available coupon codes
? High-volume use of discounts undermining legitimate promotions
Risk: Fake Coupon Distribution (Social Media/Email Phishing)
? Scammers creating counterfeit coupons or sharing invalid codes
? Increased risk of reputational damage and potential customer data exposure
Risk: Chargebacks and Discount Abuse
? Fraudsters using discount codes to purchase items, then initiating a chargeback
? Abusing promotions without making legitimate payments
Data Protection and Privacy Issues
Risk: Customer Data Breaches
? Inadequate protection of stored customer personal and financial information
? Insufficient access controls leading to unauthorized data access
Risk: Non-Compliance with Data Protection Regulations
? Failure to meet requirements of regulations like GDPR or CCPA
? Inadequate data handling and retention policies
Stay tuned for more to come on Cyber Fraud in future FIR Risk Newsletters!
Download your copy of our Fraud Intelligence Report (FIR): https://firriskadvisory.com/fir-risk-quarterly-reports/ for FREE!
You can also find this edition and all prior FIR Risk Tuesday Newsletters on our Blog: https://firriskadvisory.com/blog/
Visit our website to learn more about our services and how to engage with us: https://firriskadvisory.com/
Helping SMEs automate and scale their operations with seamless tools, while sharing my journey in system automation and entrepreneurship
3 个月Trust, but verify. This approach is especially important in fraud prevention, where vigilance is key to spotting inconsistencies.