Peer-to-Peer Marketplaces: Necessary Anti-Fraud Measures

Marketplaces will account for more than a third of online purchases in 2022. Peer-to-peer (CtoC) marketplaces have become popular in recent years, offering users the ability to sell and buy items easily and efficiently. However, the popularity of these platforms has exposed an increase in the risks associated with online fraud. Unscrupulous sellers may use fraudulent techniques to defraud buyers, while malicious buyers may use similar methods to obtain items for free. Losses linked to online payment fraud worldwide are expected to reach €48 billion in 2023.

What measures should be put in place for user safety?

There are many ways to protect your online users from fraudulent behavior. Data protection is a complex area requiring constant vigilance, as methods of collecting, storing and using personal data are constantly evolving.

Some sites may have more stringent privacy and data protection policies than others, which may include implementing additional security measures to ensure the safety of such data.

Here are the different devices :

• Double authentication : double-factor authentication strengthens the user's identity. Indeed, the latter will be able to confirm his identity by SMS or by e-mail and also sometimes via his mobile application (banking application). The goal is to prove that this user is who they say they are when they log into their account or make an online payment.
• Identity verification : as part of identity verification, a KYC / KYB (Know your Customer / Know your business) process can be put in place in order to reliably confirm the identity of a buyer or from a seller. This involves submitting official identity documents. These are then verified to ensure that the information is correct and that the marketplace is not dealing with a fake seller or buyer.
• Data collection : platforms have the possibility to strengthen their transparency regarding the use of user data and to offer options to limit the collection of this data from its users.
• Protection of personal data : it is possible to implement security tools such as encryption of sensitive information and compliance with current confidentiality standards.
• Transaction monitoring : The marketplace can spot suspicious activity, such as payments made via stolen cards or illegal sales attempts. Suspicious actions can be noted by the payment provider or the transactional solution which informs the marketplace of a fraudulent act during a transaction.
• User awareness : inform users to help them identify signs of fraudulent behavior and adopt good online security practices.
• Notifications and alerts : abnormal behavior is identified in order to isolate the customers concerned using anti-fraud solutions integrated into the platform. The latter receives notifications and alerts in order to be immediately informed in the event of doubt about a seller or buyer. By quickly informing the user concerned, it limits fraud attempts.
• Available customer support : it assists users in resolving their problems, and identifies and reports suspicious activities.

What are the most common frauds between individuals?

Losses linked to online payment fraud worldwide are expected to reach €48 billion in 2023.

The fight against fraud is a major challenge in guaranteeing security and consumer confidence in online transactions. Security measures within marketplaces are essential to be able to protect consumer data, especially as scammers imagine multiple schemes to defraud customers: payment fraud, credit card fraud, bank account fraud, phishing, delivery scams.

The most common frauds :

• Payment scams: payment-related fraud has continued to increase with technological advancement. Scammers can illegally obtain credit card or bank account information and use it to make fraudulent purchases.
• Credit card fraud: The credit card is the most sought-after means of payment by fraudsters. The consumer's credit card information was stolen to make fraudulent online purchases. It is even common for some scammers to buy a service or product to resell it to other people for a lower price.
• Phishing fraud: this technique makes the consumer believe that it is addressed to a trusted third party, when this is not the case. Bad actors can send fraudulent emails or text messages that ask for personal or sensitive information like credit card numbers or security codes.
• Bank account fraud: this type of fraud is common. Scammers use stolen credit card information to make fraudulent bank transfers.
• Bank account information can be obtained in different ways, such as hacking websites or databases, collecting data through skimming devices (ATMs) or phishing.

Are anti-fraud devices completely reliable?

Anti-fraud devices are reliable, but the user must take precautions to maintain their security. Multi-factor identification could help prevent fraud. If an individual loses their card and it is recovered by an uncaring person, a system with different factors could protect them (3D Secure). It will allow him, when the fraudster wishes to make an online payment, to receive a validation code that the latter will not be able to have.

Anti-fraud systems are reliable but are not enough; it is important that the marketplace remains vigilant and listens to its users.

Anti-fraud systems at OBVY?

Obvy benefits from PSD2 (Second Directive on Online Payment Services). When a person makes a payment, they will need to enter a one-time code or use biometric systems such as facial recognition or fingerprint.

Our Obvy solution provides an integrated approach to security and regulation. Thanks to our anti-fraud system based on more than 30 checkpoints, we can detect abnormal user behavior. Additionally, our custom identity verification system meets regulatory requirements and can be combined with dynamic facial recognition for a seamless and secure experience. All sensitive data is stored by Obvy, eliminating the need for secure storage or new expenses in this regard.