As an online vendor what types of fraud should I look out for online?
Selling goods online is an efficient, low cost and simple way of transacting. Whether you are a private individual who occasionally sells items online or an organisation with a full online shopping store, online selling is not risk free.
Credit Card Fraud
It is simple to set oneself up as a seller online. Online shopping portals such as OLX or Gumtree make it possible for anyone to sell or purchase goods online. This makes it very difficult to determine whether the person you are transacting with is who they claim to be and if they are a legitimate seller. Criminals frequently pose as honest sellers in order to defraud innocent buyers.
Cheque/Bank Deposit Fraud
Alternatively the criminal deposits a stolen cheque into the seller’s bank account and insists on urgent delivery or collection of the goods. The cheque will reflect as ‘to be cleared’ by the bank and two to three days later the cheque will be dishonoured and the deposit reversed, leaving the seller without his merchandise and his money.
A variation on the stolen cheque is the fraudulent proof of payment advice; a small amount of cash is deposited by the fraudster e.g. R100.00 and the proof of payment receipt is changed to reflect R100 000.00. By the time the seller realises the short deposit the merchandise has already been delivered.
Fraudulent Banking Details
Fraudsters may provide fake or incorrect banking details for debit order or instalment purchases. The seller loads the debit order and in good faith hands over the goods, only to discover when the debit order run is initiated that the bank account does not exist and the purchaser has absconded having also provided fraudulent personal details rendering him or her untraceable..
Fraudsters who commit any type of banking fraud as described above combine it with identity fraud. The online shopper may produce fraudulent or stolen identification or proof of address that appears to be legitimate when applying for a debt order credit purchase, or when using a stolen or forged credit card. Addresses given for delivery are often not traceable to the person or may even be a general collection depot.
Looking for more tips to protecting yourself online? Download our free e-book: