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6 Ways to Prevent Triangulation Fraud
- Triangulation fraud is a sophisticated card-not-present (CNP) fraud that involves the criminal inserting themselves between a genuine buyer and the retailer.
- The fraudster impersonates a genuine seller by creating a believably similar e-commerce website or marketplace storefront.
- The spoofed brand website or marketplace storefront will offer deals that are almost too good to be true to get the client's attention.
- When a client orders from the fake website, the fraudster uses stolen credit cards to order the products from the legitimate merchant and sets the shipping address to that of the legitimate buyer.
- Upon discovering the fraudulent transaction, the compromised cardholder demands a chargeback and the merchant will be forced to refund the money.
- Merchant losses attributed to e-commerce fraud were estimated at $44.3 billion in 2024; projected to inflate to a dizzying $107 billion in 2029.
- Employ real-time fraud detection and monitoring tools, machine learning and AI models to hunt down fraud in real-time.
- Use robust authentication methods for user accounts and strict password policies to harden transaction security policies.
- Use threat intelligence to implement additional product protections and automatic updates to your application deny lists to ban known fraudsters.
- Implement risk-based order verification, which identifies identity threats like mismatched personal details.
- Clone-proof your storefront by monitoring for potential website scrapers and deploy honeypot traps and decoy information to discourage fraudsters from targeting your online shop.
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