Fraud Detection and Prevention in E-Commerce

In today’s modern world, internet is not only a communication and networking media but provides business to many industries and companies. It acts as a transaction medium for the retailers and a shopping outlet for the buyers. Over the past few years internet has grown to be one of the most used means of information sharing and product selling (Konradt, Wandke, Balazs & Christophersen, 165-174, 2003). In case of e-business internet has certainly grown with leaps and bounds. However, has not yet provided a secure medium of transaction for the buyers and sellers.

A safe and secure environment is essential for operating any kind of business; be it online or not. Every transaction taking place physically or via the internet, certainly has some risk associated with it. It is not that a business is secure just because it has a physical presence, but businesses operating online with or without any physical presence can also be prone to thefts and burglaries. These thefts are committed by hackers who shop online through stolen credit cards.

It is usually the company who has to bear the loss. Therefore companies have to take extreme measures to avoid frauds and risks associated with it. Many E-businesses have installed fraud detection software, in order to point out any invalid orders and prevent any future problems. OVERVIEW Companies setting up e-businesses are willing to take such risks as expected returns in such business are very high. For example online casinos make huge profits, but there is always a risk of identity theft or credit card fraud.

Hence online businesses need to have a reasonable amount of security not only for regulatory purposes but also for smooth operation of the business. The risk involved in such businesses is quite difficult to detect. This means e-businesses have to take high level of precaution which eventually increases their costs. Internet has become a part of everybody’s life. Electronic businesses are becoming common with people even buying groceries through e-stores. Even though the e-world is relatively more prone to frauds etc, yet people see it as a utility.

However, security is one aspect of e-business which needs to be looked upon. Even though new fraud detectors and preventers are coming up everyday, some companies even have personalized detectors present on their websites, but still hacking, copyright violation, unauthorized entry into corporate or personal computers and networks, identity theft are all major issues. Many of these problems have obtained very serious dimensions, such as fraud . Internet frauds are similar to any other frauds.

Frauds mostly happen against the customers but many times the e-companies also become subject to them. It was found out that in 2001 almost 700,000 to 900,000 people living in America were subjected to internet or e-commerce fraud. Some had their credit card numbers stolen others paid for some product online but did not get the delivery. Many were subjected to identity theft . According to Julie Busch, who is the Vice President and technology analyst with Ipsos-Reid : “E-commerce has gone mainstream in North America.

But to some extent the easy money has been made. The fears about fraud and misuse of personal data persist and are keeping tens of millions of potential shoppers from making the leap from using the Internet to comparison shop to making an actual purchase online. Other research we’ve done shows that online shoppers are generally satisfied with the online shopping process, but at the same time, online security and privacy are issues that refuse to go away, especially in key markets such as the U. S. “