Payment Fraud Online: Steps to Avoid It

By: Naz Zeb Cr.Last Updated: July 11, 2023.

The recent few years saw a rapid surge in digital transactions as customers sought comfort in a variety of online services—from shopping and banking to entertainment—as their mobility was restricted. Online payments provide significant convenience; They are real time, often safe, and eliminate the hassles of carrying around cash.

But the growth in these digital activities has also fueled a noticeable rise in payment fraud.

Globally, the e-commerce sector alone lost $41 billion in 2022 due to such scams. The cost to consumers extends beyond financial losses. Depending on the complexities involved, ordinary individuals could even face criminal charges for crimes they never committed.

The risks of online payment fraud are multi-faceted. But how can you safeguard yourself against them? Let’s explore.

Payment Fraud: Understanding the Risks

In simple terms, payment fraud is any incident where a criminal performs an unauthorized transaction using fraudulent means.

Traditionally, this would happen with a stolen credit card or wallet. But today, digital connectivity has created far more sophisticated methods to commit payment fraud online.

Widely used techniques include:


This is when fraudsters deploy deceptive tactics to trick you into sharing your credit card, bank account, tax ID, and other critical information that could help them carry out fraud.


Cybercriminals could take advantage of weak security systems to hack into your devices and steal vital data without your knowledge.


Installing malicious software is another frequently used method to collect information.


Criminals could, for instance, mimic a reputed online retailer and direct you to a fake website so they could steal your payment details at checkout.

All these approaches allow fraudsters to commit online payment fraud in multiple ways. They can purchase products and services of high value using your credit card information. Or, they may transfer money to other accounts and pay for transactions by getting hold of your online banking username and password.

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Identity theft could even allow them to target sellers for a variety of payment frauds. For example, they can prepare a fake check under your name and make fraudulent payments, only to demand a refund from the vendor before the check bounces. Although you may not face financial losses in such situations, there could be detrimental repercussions, including arrests and lawsuits, later on.

Proven Steps to Avoid Payment Fraud Online

Payment scams can materialize through numerous channels. So, covering all the bases is crucial to avoid falling victim.

Here’s what you need to know:

Practice safe transactions

Whenever you need to purchase something online, make sure you assess the website’s security protocols. URLs that begin with HTTPS and display a padlock next to them use encryption to protect user data. These are generally safer for performing transactions than those with HTTP.

But this alone will not guarantee your safety. Cybercriminals could, for instance, hack into a website without the site owner’s knowledge and steal or change information, both on the front and back end. As a result, they could direct you to another site using a page link and steal your payment details during a transaction.

Purchasing from online marketplaces can provide a safety net against some of the risks; These large-scale companies typically deploy sophisticated security infrastructure to safeguard their customers and vendors. So, they are less likely to expose you to data breaches than unknown online stores.

However, considering the growing number of spoofed sites, you still need to practice caution. Save frequently used websites on your browser to avoid visiting them through online ads, popups, and links shared in messages and emails. If you need to type in the URL or click through a search engine result, double-check the website address for discrepancies. A missing letter, an extra hyphen, or the use of a different domain name extension can all direct you to an unsafe website.

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In addition, never save payment details and passwords on browsers, apps, and websites; In the event of a security breach, criminals could quickly get hold of saved data. Deleting cookies on your browser is also important to prevent unnecessary data tracking.

Be mindful of phishing

According to the latest reports, phishing attacks grew by a staggering 61% in 2022. These threats can appear in the form of emails, SMSs, phone calls, social media, and countless other ways. They can be highly deceitful and convincing and may often impersonate an organization or individual you already know or have made contact with.

Guarding against phishing threats is essential to minimize your exposure to payment scams. As a general rule, never disclose personal details to anyone via phone calls, emails, or other unverified digital means.

Emails are the most common method deployed for phishing scams. So, avoid unsolicited communications through them. If you must respond, contact the sender using a verified number and confirm the requirement. If someone reaches you on an unknown number, turn to PhoneHistory to find who owns it before you communicate further.

Strengthen device and account security

This is particularly important for avoiding malware threats and hacking attacks that could compromise your financial and identity-related information.

Use strong passwords that are unique to each account, device, and file. Opt for two-factor or multi-factor authentications when they are available. They include additional verifications to strengthen account security.

Keep all your software up-to-date with the latest security patches. Most devices have automatic updates enabled by default. This can save you from the hassle of regularly checking for updates. But ensure it is enabled and activate it if you have not already.

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A strong virus guard is another essential requirement for connected devices. Select one with anti-spam and ad-blocker features for added protection.

It also helps to avoid public computers. They could carry viruses that can transfer to plug-in devices. Shoulder surfing is another prevalent issue in public places that could expose confidential data to snooping strangers.

Public Wi-Fi connections are equally dangerous. Never access your bank account or perform card transactions on these unsecured networks.

To Conclude

Online payment frauds continue to morph into new shapes and forms with elaborate techniques. To tackle them effectively, learn and practice safe transactions, be wary of phishing, and keep your devices, accounts, and data secure with sufficient security protocols. In addition, check your credit card and bank statements regularly. This practice will help you identify suspicious activities and minimize damage before they progress.

Last Updated By on July 11th, 2023 in Learning

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