Fraud in eCommerce – eCommerce Toronto Meetup

Here are some of the notes taken from our last eCommerce Toronto meetup on Fraud in eCommerce

Offline Fraud

  • On the payment processing side
  • Credit Card Fraud
  • Counterfeit Bills

Online Fraud

  • Higher ticketed items are more susceptible to fraud
  • Flipping Product – Buy from Snuggle, sell on Ebay, Kijiji, Craigslist
  • Fraud charges – The merchant never wins

Billing address vs Shipping address

  • Not all transactions match
  • Gift items – Customers have items shipped to a different location
  • Supplement subscriptions – goods have to be shipped directly to the customer, no match, no shipment
  • Online carts and platforms have built in address verification systems (AVS) which processing companies can then restrict which orders can be processed or rejected.


  • Chip technology
  • PIN protection – implemented in Stores. How do you make the transition online?

Customer Credit Card Protection

  • The Merchant Never get dings
  • Manual Approving transactions

Where do you see the most Fraud?

We asked eCommerce merchants this question, and the answers the majority gave was Toronto and Montreal. This areas may not apply to all retailers and credit card holders because fraud is everywhere and differs from location to location.

Fraud in the U.S

  • Fraud is very big in the States.
  • Cards across borders get flagged in an attempt to minimize the amount of fraud between Canada and the U.S.
  • So frequent, fraud agencies (FBI) don’t bother with certain fraud amounts

Credit Card Specifications

  • Address 1 failure
  • If the billing and shipping address do not match, many retailers and eCommerce merchants will reject the transaction

Risk Management

  • Reverse lookup phone number to match the address
  • Make sure the address matches
  • Use the telephone – Fraud numbers don’t exist (pay as you go, number keeps ringing)

How many people do you have manage risk?

  • Business owners and companies have dedicated teams to manage risk
  • Risk Management is a huge sector in the financial and banking industry