How Can Consumers and Merchants Evade Online Fraud
Barclays, a British universal bank, released data in June revealing people aged 21 to 30 are most likely to be scammed online. Despite that finding, the same research found that the majority (76%) in that younger group said they are confident they would not be a victim.
The majority of scams (77%) happen on tech platforms such as social media, purchase/auction sites, or dating apps. This makes younger people more susceptible to becoming a victim, warns the Barclay research.
A common misconception is that most ad scam victims are elderly people. In reality, cybercriminals do not discriminate. Social engineering is a manipulation technique used on younger online audiences that exploits human emotion.
It is not just consumers who are targets of online fraud. Website merchants also are in cyberthieves’ crosshairs, warns Jake Loveless, CEO of web acceleration company Edgemesh.
Consumers become victims of purchase scams when people buy goods that never arrive or are not as advertised. These scams are the most common type, accounting for more than half (60%) of all scams in the last three months, according to Barclays’ data.
The likelihood of falling for this type of scheme decreases significantly with age, with 21- to 30-year-old consumers being 15 times more likely to be a victim. Smartphones rank as the most common type of item fraudsters advertise.
A quarter (25%) of respondents said they could only go one day without replacing their smartphone if they lost it. Nearly one-third (31%) admitted to being willing to shop with a brand they did not know if the seller offered a good deal.
Older people are more likely to fall for higher-value scams. But the most common scams trick victims into buying something they never receive. Scammers usually offer items significantly lower than their value to lure in buyers. Before rushing into a potentially fraudulent purchase, would-be buyers should question why any legitimate seller would do this. Then check the seller’s website and be wary of anyone asking for a bank transfer rather than a debit or credit card transaction. Legitimate sellers do not usually do this.
Scammers use social engineering and its psychological manipulation to get viewers to unverified pages, fraudulent schemes, and malicious scams. Emotionally-charged ads are an effective low-tech way of luring users to listings of fraudulent or non-existent products, financial schemes, phishing scams, propaganda, and other low-quality landing pages. Cybercriminals attempt to appear legitimate and build trust with online audiences.
There are five tips on how to identify and avoid fraudulent deals:
- Acknowledge that differences exist between ads and editorial content. Ads with salacious text or imagery are red flags.
- Do not click on ads with mix-matched fonts/characters within the same sentence. To bypass text-recognition mechanisms, scammers replace English characters with special symbols.
- Beware of cloned sites with mistakes in the domain name that mimic the branding of reputable sites. They are probably malicious.
- Look for fake comments that attempt to build trust in the deal/product/offering.
- Do ample research on the advertiser/brand before sharing credit card details. Only buy products/services through verified companies/sellers.
Clickbait as well uses cognitive tricks to get clicks. Typically, it involves emotional manipulation appeals to impulsive emotions such as fear, excitement, curiosity, anger, guilt, and sadness. Learn to spot clickbait in all its forms and communicate directly with website owners when they face a bad ad.
Financial scams often connect to trending news like cryptocurrency and government support programs. The goal is to trick internet surfers to send money or share personal information.
About 56% of website owners found clickbait on their sites last year. Only 9% of website visitors reported inappropriate ads directly to publishers through customer service or social media.
Website owners should keep in mind the legal and brand obligations to ensure that the ads they host and the landing pages to which they lead meet their standards for brand suitability.
Criminals are trying to either gain advertising revenue with bot-driven clicks, gain importance by driving a high rate of bot-based clicks, or intentionally targeting competitive ads to increase costs and ultimately wasting ad budget.
The starting point for brands to protect against fraud is always to measure the level of the problem. Often this can be done by looking at the ratio of engaged users versus non-engaged users. In an efficient online store, this should be about 80% plus. From there, adding inline protection and an IP reputation system to identify invalid traffic is the next step. Start ensuring every dollar of ad spend is put in front of customers rather than bots and bad actors.
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