Electronic payment fraud
If your business sells goods or services online you will probably find it necessary to accept electronic payments from your customers. Electronic payments are quick and convenient, but they do present possible opportunities for fraud. While these threats are not unique to online businesses, they are a particular concern that you can protect your business against.
Aside from the risk of information theft, the primary concerns of electronic payments are Overcharging and Chargebacks.
Overcharging scams work when a scammer deliberately sends you a payment in excess of what they were required to pay. This payment is usually made using false or fraudulent information. The scammer then asks that the “excess” payment be refunded. Since the scammer never paid anything through legitimate means this refund becomes their profit. To protect your business from this scam it is best to set up your payment system so that the amount owing is always clear and so that excess payment is not possible. Depending on the payment methods you accept, it may not be possible to prevent a customer from sending too large a payment. An example of this would be a bank transfer. In such cases, do not accept payments in excess what you have invoiced. This will prevent overcharging.
Chargebacks occur when a business receiving a payment is then later charged the amount of any transaction errors or even the full payment. Chargebacks can happen innocently, but they can still be a problem. Scammers can cause chargebacks by using false payment information or by dishonestly contesting charges. For example, a scammer might claim that they never received what they had ordered. To avoid this you should document every stage of a sale and ask for proof of delivery.
You can also protect your business from both of these scams and more by accepting payments through a payment service that offers extra protection against these scams.
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