With the emergence of the internet, there is a significant rise in digital payments. Most of the customers, across the globe, are probably online. More people are opting to shop online for items like clothes, furniture, cosmetics, shoes, fast-food, etc. that typically would have been purchased in-store.
Not only virtual shopping, but online financial investments have increased tremendously with the increase in the number of people opening online investment accounts. The internet is considered by investors as a primary instrument to research and trade securities, including stocks and bonds. Investors collect a lot of information with respect to the stock and make the decision to buy or sell. Online platforms are cheap and make it easy for them to buy or sell.
At the same time, the risk of fraudulent activities has increased too. With numerous customers making use of digital payment and storing the card details and other crucial information online, scammers can’t avoid taking advantage, resulting in the rapid growth of digital payment fraud.
What is digital payment fraud?
Digital payment fraud is any form of the fake or fraudulent transaction completed by a hacker or cyber-criminal. With the advancement of technology, Cyber Crime is also increasing. Through the internet, the attacker robs the person of funds, private merchandise, interest, or confidential details. These activities can be classified as unauthorized transactions, loss of merchandise, false refunds, etc.
Internet fraud in e-commerce is popular ever since e-commerce sites were introduced. Since companies figured out a way that consumers could securely purchase goods from them without actually visiting the physical store, criminals also have done their best to access and profit from that data available on the internet.
How does it happen?
Scammers have become skilled in illegally collecting data online. Hackers often pretend as legitimate people and contact the card owners asking for sensitive details and information. They then use several ways, as mentioned below, to interact and steal crucial data.
- Illegal websites
- Phone calls
- Sending malicious software to smartphones
Cybercriminals often operate in teams to breach data security systems. They check for bugs or fixes that have not been updated in quite some time. Such loopholes make it easy for hackers to gain access around the firewall and acquire confidential information.
Types of digital payment fraud
Identity theft – This is not a new thing, since it also happens outside cyberspace. Typically, this type of fraud entails a cybercriminal stealing your personal information by spoofing your system. In order to perform illegal online payment transactions, the hacker then uses your data. Since the cybercriminal has all the essential details, they can bypass restrictions and firewalls on fraud detection.
The merchant on the e-commerce website might not realize that it is the hacker who is doing the transaction instead of the real user, as all the details are being provided.
Phishing – You would have come across numerous email subscriptions and websites that persuade you to opt for updates and notifications. In most cases, these sources would ask you to provide certain personal information, including your credit card details. If the email is not from a reliable source, your data will be compromised and used to carry out fraud e-commerce transactions. This is known as a phishing attack.
Merchant Identity Fraud – This involves a fraudster that builds a platform quite similar to that of the merchant account. The attacker then proceeds and imposes fake payments and fees on stolen credit cards. This whole operation is carried out in a quick way before the cardholders realize they are being cheated.
Pagejacking – At times, e-commerce websites are hacked by criminals who direct the customers to an unsecured network. This untrusted site can contain malware that can break webpage security systems and steal the customer’s funds.
Securities fraud – Speed, fast access, and anonymous activity, all provide a suitable atmosphere for securities and stock market fraud. This can happen in several ways.
The most common of all involves providing misleading or fake information on a specific stock to shoot up its price. Investors treat this information as genuine and start buying the stock, resulting in a price increase. By the time they realize that the information is fake, the stock price falls, and the investors lose their money.
Another way is to offer stock that simply does not exist. Online investors, surfing the internet for information, invest in such stocks without realizing they are being the victim of a scam and eventually end up losing their money.
Stock market fraud–With the advancement in technology and everything at our fingertips, there has been a rise in stock market scams too. Unknowingly, the investors are exposed to the immense risk of a criminal who uses their personal data and investment for illegal trades, leaving investors at a loss.
Before the investor realizes that he/she has lost the money to a scam, the criminal would have shut this activity and moved to another fraud.
There is an increase in the number of victims of stock market scams in Dubai. The scammer deceives the victim by fraudulent means to persuade the investor to surrender their capital or property.
Foreign exchange fraud – This is a trading technique used to deceive investors by misleading them that by investing in the forex market, they can expect to make a high profit. Currency trading scams also lure customers through radio advertising, newspaper ads, or appealing internet pages.
There have been cases of forex trading frauds in Dubai, involving hundreds of victims. The scams involved transfers of foreign money meant to escape bank transaction charges and investments in different small businesses.
As part of forex investment scams in the UAE, multiple investors were persuaded into forex trading with a promise of making a high profit. The brokers refused to pay the investors at some point, customers then moved to the court in order to recover their capital.
E-commerce firms have already begun to raise awareness regarding internet corrupt practices. Even though it is difficult to eradicate cybercriminals entirely, you can take certain measures to prevent internet fraud.
- Use a certified payment processor
- Be updated with recent trends in digital payment fraud
- Use tested antivirus software that runs regular checks
- Encrypt the transactions and emails containing confidential information
- Regularly change your login and passwords
- Regularly update network security systems
Depending on the severity of the case, you can also seek legal opinion for guidance and expert advice.
Reporting a cybercrime
Cybercrime can be extremely difficult to investigate as it breaches legal jurisdictions. In addition, a criminal may terminate one online fraud activity and start a new activity with a fresh approach even before it is noticed by the authorities. Having said that, cybercrime law enforcement officials are becoming more vigilant and dedicate more resources to respond to such threats.
You can report your case to the local law enforcement authority as soon as you realize you are a victim of such fraud. Even though it is not necessary, but it is ideal to keep evidence of the incident. This may include mail receipts, card receipts, phone number of the caller, messages, etc.
In Dubai, you can report cyber crimes through various channels like the Dubai Police’s website, the eCrime website, the ‘My Safe Society’ app, or to the local police station.
Why chose Bin Eid Advocates services?
We provide legal services to all types of fraud, including cybercrime. We resolve all disputes keeping in mind our client’s best interest. Our skilled and experienced attorneys are capable to defend clients in a court of law.
There are simple and stringent laws against cybercrime in the United Arab Emirates, which includes fines, punishments, and even deportation (in case of expats) for those who are convicted and found guilty.
Our law firm, with a team of professionals with deep skills and experience in settling cybercrime cases, will assist you in such a matter.
E-commerce companies rely on digital platforms for the transactions made by the customers for respective goods and services. Increased electronic transaction levels have also contributed to an increase in the number of illicit practices. In addition, as a way to boost their profits, most companies have adopted the practice to promote online purchases through their websites.
Through a digital payment system, vast sums are electronically exchanged between accounts. As a consequence, more and more cybercriminals are taking advantage of dubious payment systems to steal information and funds.
It is necessary for internet users to be conscious that not all e-commerce sites are genuine. It should also inspire e-commerce firms to go the extra mile to secure their websites and guarantee that consumers are not vulnerable to fraud.