Fraudsters Are Using This Tactic To Attack Your Business

Oct 12, 2021

The Fraud Economy continues to experience growth as fraudsters did not slow operations during the pandemic. Always on the prowl, seeking vulnerability and weak links (like the pandemic), these opportunistic bad actors are ready to attack when the coast is clear. 

In 2020, experts have reported that as much as 1 Trillion USD had been lost due to cybercrime worldwide.  

What Is The Fraud Economy?

The Fraud Economy is made up of a very intricate ecosystem where one type of fraud acts as both a “jumping-off point” and a bridge between other types of fraud. 

Cybercriminals have become more sophisticated about the type of market they direct their attack towards and have learned to avoid all security measures set out by fraud teams.

Just like traditional economies, the Fraud Economy employs a variety of levels of skilled labor, dealing with supply and demand, as well as pricing. Fraudsters use “secondary marketplaces” in order to purchase and trade stolen information. Most often this information is found on the dark web. 

The Fraud Economy is responsible for initiating content abuse, account takeover, and payment fraud. 

Content Abuse…A Formidable Weapon

Content abuse has existed as long as digital businesses have been in operation. Along with online shopping, discussion forums, and social networks, there has been a growing and destructive evolution of attacks. These have been in the form of spam, scams, fake reviews, and misinformation. 

The Internet continues to be a sort of wild west or final frontier, with little to no regulation. As a result, just about anyone can sell just about anything. Merchants are largely left to themselves, without any tools or expertise to protect themselves or their customers. 

But it doesn’t end with just the content abuse, what happens after one encounters it, now this is where the real trouble begins. 

How It Works

Content abuse is just a springboard for fraudsters to engage in payment fraud. How it works is that they will create a post, a comment, an email, or a text message. Within it, they will disguise a “malicious link”. 

Another tactic is that they will drive consumers to an unsecured site or media. But the key for it to work is that the consumer must “engage” with that link. They can do so by sharing it, or simply clicking on it themselves. The former action enlarges the pool of potential victims, the latter affects only the one who clicked on the link. 

Cybercriminals typically commit account takeover and payment fraud by using stolen data. Then there’s the dark web, also known as the “fraudster flea market”. This is where anyone can buy valuable information from compromised accounts. They can also sell the information they’ve hacked. 

Once fraudsters have procured sensitive information via malicious content, it can be used in several ways:

  • To coordinate account takeover attacks on a person or group of people to acquire more data
  • To supplement information stolen elsewhere via a different attack or purchased via the dark web.
  • To steal money, rewards points, gift cards, or other currencies. This data can also be sold on the dark web for a sizable profit. 

COVID-19 And Its Contribution To Content Fraud

The global pandemic brought along with it a global economic disruption which opened the door to a surge in content fraud. In fact, a 109% year-over-year increase was seen. Digital e-Commerce merchants continue to be heavily targeted as fraudsters are always seeking opportunities in uncertainty. 

Trust and safety teams must work tirelessly to ensure they are adapting their strategies to effectively thwart content fraud. 

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Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending on the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.

EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.