Internet Merchant Accounts and E-commerce Fraud
ByBecause users of Internet merchant accounts and customers often do not have the opportunity to interact face-to-face, the kind of anonymity afforded by these all-electronic transactions can tend to encourage fraudulent activities. Although tools to detect and prevent e-commerce fraud have improved over the years, there is little room for complacency as criminals are finding ever more sophisticated methods to evade detection. And, sheer growth in the volume of e-commerce transactions can complicate the process of weeding out possibly fraudulent interactions from perfectly legitimate ones.
Fraud does not come just from the consumer side; more sophisticated criminals will use merchant accounts in various ways to reap ill-gotten gains. As seen in a recent case, Gucci America was successful in shutting down an operation which sold counterfeit Gucci merchandise over the Internet, and now they are going after the companies that provided Internet merchant accounts to the fraudsters. Companies concerned with this type of fraud are also looking for better ways to prevent money laundering through operations that appear on the surface to be conducting a legitimate business, but are just using an Internet business to conceal the origin or destination of funds.
On the consumer end of things, fraud perpetrated through identity theft has been of such a focus that legitimate transactions that appear on credit card statements, but are not easily identified by the consumer are often reported as fraudulent. This is still a major thorn in the side of Internet merchant account providers, since there is still no streamlined way of clearing up issues like this that are reported as fraud to credit card companies by consumers. In the world of virtual business, products and services can be repackaged and resold through a bewildering array of hand-offs; if a customer is not able to connect the charge as it is printed on a statement to an identifiable transaction, it is too easy to claim it as fraud.
