Businesses everywhere are being hit by Internet terrorism — online fraud.

Merchants are certainly aware of online fraud and are trying to fight it. But are their efforts working?

An anti-fraud study in 2012 by and SignatureLink indicated merchants weren’t successful.

“We applaud the many merchants using active authentication techniques but the user experience could be improved among legitimate customers by deploying risk-based passive authentication to invoke active authentication,” said SignatureLink CEO Greg Wooten.

He indicated the merchants are primarily using authentication techniques from Verified by Visa and MasterCard SecureCode is employed by 52 percent of retailers, but to no avail concludes the study.

“Very few merchants are using second-generation geolocation solutions,” explained Mr. Wooten.

“The problem is that a fraudster with any skill whatsoever simply spoofs his IP address and easily bypasses a first-generation geolocation filter.

“The merchant ends up with a false sense of security while remaining vulnerable to fraud,” he added.

Purchaser’s approval

The study indicates chargeback prevention and management are important in fighting fraud.

But 90 percent of merchants fail to get the purchaser’s approval on their terms and conditions (T&Cs) as well as failing to obtain voice or signed consent on refund policies.

Moreover, 50 percent of them merely ask the buyer to check a box, and 40 percent don’t get any approval at all.

Such oversights allow cybercriminals to obtain the merchants’ products for free – the purchasers lie to their credit card companies – claiming false charges on their cards – leaving the merchants holding the proverbial bag.

“That in itself is a problem,” noted Steven Casco, founder and publisher of, “because our study also found that over 60 percent of merchants never have the buyer’s signature on file for any transaction, and over half of merchants lose the chargeback representment process almost every time.”

A poor strategy is to use a link or popup with the T&C.

“This approach is not in line with current regulatory standards and is actually considered deceptive,” Mr. Wooten pointed out.

“There’s no way for either side to prove their case or to determine what the T&Cs were for a given transaction,” he explained. “Had they captured a signature within the sales draft that carried a true chain of custody, it would be a different story – because in the e-commerce fraud space, the signature ultimately rules.”

From the Coach’s Corner, here are more tips to deal with threats:

Plagued by Chargebacks? 5 Ways to Fight Back — Increasingly, merchants are being victimized by chargebacks in illicit of behavior credit-cardholders. To avert being victimized by such fraud, here are five key steps.

10 Unusual Prevention Tips to Effectively Fight Fraud — If you ever think you might be victimized by fraud, you probably are. Businesspeople are typically victimized by fraud in several ways. The causes will surprise you. Here are simple ways to prevent fraud.

Best Practices to Buy Cyber Insurance for Business Security — Security has become problematic in all sectors – business, nonprofits, government, politics and individuals. The aggregate financial losses are so staggering, cyber insurance is a necessity.

With Fraud Running Rampant, How HR Can Help Prevent It — By taking alert measures, human resources can play a major role to put a dent in the global epidemic of fraud in the workplace.

Key Measures to Prevent, Recover from Ransomware — Published reports indicate ransomware cost businesses $350 million in 2015. The FBI considers ransomware attacks one of the three worst cyber threats.

Tips to Avoid Advertising Scams Tricking You to Ask for Tech Support –Advertising scams that prey on Internet consumers have prompted four Internet companies to band together to fight the abuse. The scams use harmless-looking ads to trick consumers into using phony tech support that actually enable cybercriminals to invade the unsuspecting owners’ devices.

Benefits, Precautions in Issuing Business Credit Cards to Employees —  Business credit cards are easy, cost-effective ways to control expenses. They’re a great small business tool to pay expenses and to manage your cash. Indeed, there are dos and don’ts to remember in case you’re one of those entrepreneurs who trust your employees to use a company credit card.

Protect Your Bank Accounts So You Can Sleep at Night — Imagine for a moment — you’re sitting at your desk enjoying a second cup of morning coffee. Then, your phone rings. It’s a call from your bank to discuss possible fraud. Your bank is concerned about possible suspicious activity with your accounts, and wants to make sure you’re not a victim.

“Never let your ads write checks that your website can’t cash.”

Avinash Kaushik


Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.

Photo courtesy Searick1 at