E-Commerce Fraud and Scams Study - and Alibaba's Advice

Alibaba.com fraud preventio

Cross-posted from Alibaba Fair Play Fund Facts:

Found an interesting survey today in Financial Fraud Law blog about e-commerce fraud and scams.  The bad news is that it is going up.  They make four main points as to why it is on the increase:

1. "Stolen Data" – one of the recent major data breaches included credit card numbers, and the fraudsters are using the data compromised email accounts is being used by the criminals to target consumers with really good phishing emails, referred to as spear phishing. The fraudster knows the consumer conducts business with a specific company. 
2. The "Spear Phishing" – a major recent data breach that fraudster creates a targeted email from the company who conducts business with the consumer, and is able to collect enough information to compromise the consumer.
3. "Malware" – malware has spread and become more vicious. While the malware is more vicious, an impact on eCommerce has yet to be determined; although it may come in the future. Additionally, according to data on the APWG's website, malware for the past 12 months in the U.S. was 35.85 percent, and in the past 90 days was reported to be 25.48 percent. Based on these numbers, malware attacks are actually down according to the website.
4. "Fake eCommerce Donation Sites" – After researching this theory, it is believed the increase in fraud attacks is tied to fake donation sites that took advantage of the earthquakes and Tsunami in Japan. This belief is supported because the fraudsters have the exact information on the data elements for making purchases, and the accuracy rate is very good. Therefore, it is most likely the data is being collected from fraudulent sites that took donations from the devastating earthquakes and Tsunami in Japan. It is believed the fraudsters used social networks to promote the donation sites to expand their reach farther and faster than has been viewed in previous years.

What do these have in common with the topic of this site, Alibaba.com's attempts to help customers avoid fraud?  A lot.
Prevention is the key to making sure that you can avoid becoming the victim of an online scam.  Alibaba.com has posted a series of tips to help avoid being ripped off and Tip #7 on the Fraud Case Studies page is "Fraud Case Study 7 - Remain Vigilant!"

1. It is an advanced fraud trick; the fraudster will use the psychology of the supplier to conduct fraud activities. He will place small orders first and transfer payment quickly to convince the supplier he is a good partner. Then he will place a large order and set a trap for supplier. Based on the good cooperation of previous business, the supplier will fall into the trap easily.
2. Always follow normal foreign trade processes when doing business with your partner.

Hope this helps.  Stay vigilant!