Marketplace Fraud: Who Is Responsible?

Online marketplaces have seen strong growth in recent years, offering consumers a wider choice of products and more flexible delivery options. However, this strong growth has also led to an increase in fraud. These can have a significant impact on buyers, sellers and the marketplaces themselves. The question then becomes who is responsible in the event of fraud on an online marketplace. Namely, losses linked to online payment fraud worldwide are expected to reach 48 billion euros in 2023.

Are buyers responsible for online marketplace fraud?

Buyer protection policies and safeguards are in place to protect against fraud. However, despite numerous precautions, the buyer is informed of the steps to follow to complete their purchase. If the latter chooses to go through another sales channel in order to make their purchase, the buyer will not be protected by the platform and will be “responsible” for this scam.

When the buyer is a victim of fraud, they should immediately report the problem to the online marketplace and follow the appropriate procedures in order to obtain a refund.

Can sellers be responsible for fraud?

In order to sell on a marketplace, the seller must follow the process imposed by the platform. The seller, as a general rule, is aware of the steps to follow to offer his service or product for sale.

Marketplaces have protection policies towards sellers in order to maximize the security of transactions. Thanks to various reports, the marketplace ensures the security of its sellers (identity verification, user reviews, double authentication, etc.). However, it is possible for sellers to be defrauded by fake buyers. In this case, when the seller has followed the platform policy and the steps indicated, he cannot be held responsible for fraud. In the event that the seller has chosen to go through a sales system other than the platform, he cannot be compensated by the marketplace.

Can online marketplaces be held responsible for fraud?

Online sales platforms have a duty to provide security to their users. Marketplaces have an obligation to adopt measures to protect them against fraud, in particular by checking the backgrounds of their users, offering guarantees of protection to buyers and blocking the accounts of fraudulent users.

Marketplaces should also be transparent about buyer and seller protection policies and provide ways to report fraud.

There are many cases of online fraud, especially with the advancement of technology. The scenarios are different, which is why marketplace policies and guarantees are important.

How can online marketplaces fight fraud?

Today, marketplaces have numerous tools to combat these risks of fraud.

For example, they can set up an identity verification system for buyers and sellers.

We have also written an article which shares the documents to request in France in order to verify the identity of a user.

Online marketplaces can also implement fraud detection tools, such as algorithms to detect suspicious behavior or the use of numerous bank cards for the same user. Many payment service providers offer these security techniques. Also find our article which explains the different anti-fraud devices required.

Marketplaces can educate sellers and buyers on good sales practices to adopt. This may include a blog explaining how to identify counterfeit products and scams, as well as instructions on how to report problems to the marketplace.

Fraud on the marketplace with Obvy

Obvy provides effective protection for users against scams and fraud. 

Obvy's all-in-one transactional solution includes identity verification for individuals and professionals. This mandatory procedure is facilitated by Obvy's technological tools (document collection, cropping, flattening, etc.) to optimise document processing and increase the acceptance rate.

Obvy is also able to carry out biometric identity checks, simply and dynamically via the user's webcam or telephone.

We invite you to discover the full range of functionalities we offer businesses (marketplaces, e-commerce, software solutions, etc.), enabling them to increase their revenues simply, quickly and cost-effectively.