Independence day sale: Types of online frauds and how to prevent them

The threat landscape includes various tactics, with phishing, malware, and data breaches being among the most notorious. Data breaches, in particular, have emerged as a significant concern for businesses and consumers alike.

According to Dedhia, the exposure of sensitive personal information such as credit card details and passwords can lead to identity theft and credit card fraud. In India, the cost of successful e-commerce fraud is expected to double from $5,000 in 2022 to $10,000 in 2023.

A significant portion of fraud incidents in India, approximately 57 percent, is classified as 'platform fraud' and is associated with social media, e-commerce, enterprise, and fintech platforms. These instances highlight the vulnerabilities of various digital platforms and the pressing need for heightened security measures.

Dhiraj Gupta, Co-Founder and CTO of mFilterIt, a global ad fraud detection and prevention company, points out how fraudsters exploit users' trust by impersonating renowned brands and employing advanced phishing techniques.

"Fraudsters promote fake coupons and 'too good to be true deals' to attract users to their websites. Once the user has punched their details or placed an order, they are often led to a fraud trap. As a result, they lose money and also give fraudsters access to personal information that can be used for other fraudulent activities. The fraudsters also use other techniques like impersonated websites, counterfeit products and misleading advertisements to lure users," Gupta said while speaking to CNBC-TV18.com.

Experts emphasise the importance of robust Know Your Customer (KYC) and customer due diligence processes for payment transactions.

"The emergence of technologies like deepfakes has added a layer of complexity to fraud detection. To counter this, Artificial Intelligence (AI) and Machine Learning (ML) are now integral to the fight against e-commerce fraud. These technologies can spot suspicious activities, identify fraudulent transactions, thwart account takeover attempts, and even recognize fake websites," Dedha said.

Gupta of mFilterIt stressed the significance of cautious shopping behaviours during sale periods.

"Shoppers should avoid deals that seem too good to be true and refrain from clicking on suspicious links. Opting for purchases only from trusted brands can provide an added layer of security against fraud," he said.

Only browse secure and authorised websites: One of the most common tactics being used by scammers to steal information is by providing a link to a website that looks similar to a secure and authorised website, with slight modifications that are not noticeable at first glance. However, upon inspection, one will easily be able to notice that the website URLs often have an additional letter or extension in them, to mimic a look of a common website.

When a user clicks the link, they are often directed to phishing websites that ask for payment or personal information, which is then misused by the scammers. The easiest way to note whether a website is secure is by looking at the URL. Authorized websites will usually have a logo before the 'HTTPS' and will have the exact name or extension that the website is known for.

Never share OTPs with others: To combat scammers from using the payment information of others, banks all over India have initiated a two-factor authentication model. While this has helped combat scams and misuse of financial information to a certain extent, it can still be exploited if a user shares their OTP with others. If users receive an OTP that they haven't initiated, it is important to change the account passwords immediately and notify the bank about this unauthorised transaction. It is also a common policy for employees of an e-commerce website to never ask for OTPs from customers, and representatives asking for an OTP should always be viewed as a red flag and reported.

Don't save payment details on e-commerce websites for future use: While users may trust certain commonly used websites or platforms, it is always advised to never save the payment details, even if users plan to purchase products from them in the future. This is because if a site is compromised in any way, saved cards and payment information can easily be exploited and accessed by those trying to gain access to mass information.

In a world where digital transactions have become the norm, staying vigilant is crucial. As users explore the realm of Independence Day sales and other festive offers, they should remember that vigilance and prudence are the best allies against the devious tactics of cybercriminals.