What is interception fraud? How to detect & prevent interception fraud.

Interception fraud occurs when fraudsters make online purchases using stolen credit cards. They ship to the (valid) billing address linked to the stolen card, which will bypass checks that look for discrepancies between billing and shipping addresses. Once the transaction is complete, the fraudster will find a way to intercept the goods. Most commonly, they will try one of these techniques:

• Ask customer service to change the shipping address on the order before it ships.
• Contact the shipping service directly to reroute the package to a different shipping address.
• Wait at the stolen card owner’s address for the package to arrive and physically intercept it.

How to Detect Interception Fraud

Interception fraud is one of the most difficult types of e-commerce fraud to detect, particularly because the initial shipping address matches the address tied to the customer’s card. However, you can look for the following red flags to detect possible signs of interception fraud:

• Unusual IP Addresses: If the customer has purchased from you before, you can compare the IP addresses of different purchases to find discrepancies—for example, suddenly ordering from the US when they usually order from Europe. It’s possible that the account owner moved, or is on vacation, but it is safest to dig deeper.
• Manual Shipping Address Updates: If a “customer” calls in requesting to update their shipping address for a particular order, it could be a fraudster’s attempt to intercept the goods. Try to gather more details to verify the identity of the customer before updating the address.
• Larger Orders Than Average: If a customer has purchased from you before, you can see the history of how much they typically spend with you. If you suddenly receive an order for a much higher amount, you might want to examine it further.
• Multiples of Items: One way that fraudsters increase their profits from interception fraud is by reselling the items, which could mean multiple purchases of the same item. If a customer is buying multiples of the same item in one order, and that is not typical behavior for the customer, you’ll want to look into it.
• Expedited Shipping: Putting a rush on things might the fraudster’s attempt to complete the process fast, before suspicion arises, in hopes that your business won’t have time to investigate any discrepancies. If you see expedited shipping along with other red flags, you may be dealing with interception fraud.

How do you prevent interception fraud?

The best way your online business can help prevent interception fraud is by first preventing payment fraud and keeping fraudsters from using stolen credit card numbers on your websites and mobile apps. Below are some tips to help stop payment fraud.

Regularly Audit Your Security

Payment fraud happens when cybercriminals find vulnerabilities in your system. You should regularly assess your own website and payment processing systems for flaws.

Use Address Verification Services & Card Verification Values

An address verification service (AVS) helps check a billing addresses against those on file with the bank, which can help in some cases but will not stop payment fraud when the fraudster has the correct address. Also using card verification values (CVVs) or card security codes (CSCs) helps ensure each customer has the physical card in their possession when making their purchase.

Gather Minimal Sensitive Data & Protect It

If you’ve stored full payment details for your customers, a fraudster can more easily steal the card information through account takeover, often using bots. Therefore, it’s best to only collect the basic data needed to complete a transaction and ship the product. Additionally, ensure you use secure data transmission methods, such as HTTPS, to encrypt data in transit.

Anti-Fraud Protection

A good online fraud detection solution is designed to identify and assess all of the red flags for criminal behavior automatically, making it easy to prevent payment fraud from ever happening in the first place, significantly reducing your risk for interception fraud. You should ensure that every request to your site is constantly monitored by the solution, so requests and behavior out side the norm for your customers can get caught and addressed in real time.

Intercept Online Fraud with DataDome

Interception fraud is only a subset of e-commerce fraud, but it can cause your business to lose significant revenue in lost inventory and chargebacks. DataDome’s bot and online fraud protection is machine learning-powered to works in real-time, all the time, and determine if each request is suspicious within 2 milliseconds. DataDome’s solution integrates with your tech stack in minutes, and determines the intent of each request at the edge in real time.

To see if you are facing interception fraud or other attacks to your website, mobile app, and API, try DataDome for free to see a real-time dashboard of your online threats.