Cyber Monday Scams: What Businesses Need to Watch Out for in 2024

Introduction

Cyber Monday is one of the biggest opportunities for businesses to increase their sales in 2024. However, it also comes with several fraud and scam risks. Being one of the biggest online shopping events, the increased traffic creates ample opportunities for cybercriminals to target businesses with various scams and fraudulent activities.

Every year business faces several financial risks from crimes, especially during huge sales occasions targeted at B2B networks. To make Cyber Monday profitable for companies, not fraudsters, cybersecurity should be a top priority.

Top Cyber Monday Scams and Frauds Businesses Must Be Aware Of

1. Account Takeovers (ATO)

Account takeover fraud occurs when anyone gets unauthorized access to a business’s accounts, either through phishing emails or data theft.

Especially with the increase of massive orders placed through the internet during Cyber Monday for buying various things, these scams have emerged. According to data by FTC, one of the largest online platforms, topped the list of the most impersonated companies in the world for the year 2020-21. It has also been reported that a lot of employee data got hacked in one of biggest cyber-attacks of 2023.

2. Payment Scams 

Another problem that is being experienced by businesses today is payment scams. Here, the fraudsters make fraudulent purchases using other people’s stolen credit cards or fake identities.

During Cyber Monday, companies are most vulnerable to being deceived with fake payment details or fake invoices. These scams can be avoided when proper payment security measures like encryption and relevant fraud detection tools are used by business organizations.

3. Business Email Compromise (BEC)

BEC is a phishing attack where criminals impersonate a senior executive, a key employee, or even an important customer or vendor. Their goal is to trick employees into transferring money or sharing sensitive information.

These scams are especially common during occasions like Black Friday, Cyber Monday or similar events. They often occur when businesses are immersed in preparing for these events, rushing to meet orders and consequently rushing their messages without proper scrutiny of the sender.

Ensuring that the employee can identify the BEC emails is critical to lessen the occurrence of the BEC attack. In August 2024, according to a report by Fortra, 71% of the emails were sent from free webmail, one of which was Google.

4. Triangulation Fraud

Triangulation fraud is a growing threat, especially when businesses depend upon third-party vendors for Cyber Monday deals and promotions. Scammers create fake websites to trick buyers into making purchases and hence, steal their credit card information.

Businesses that don’t conduct a background check on their vendors properly may unknowingly fall victim to this type of scams and cause them financial and reputational harm.

As per the research by eMarketer, around $10 billion CNP fraud losses including Triangulation Fraud have occurred in USA in 2024.

How Businesses Can Safeguard Against Cyber Monday Scams

1. Implement AI and ML for Fraud Detection

Artificial Intelligence and Machine Learning are considered to be one of the best ways of preventing fraud. As these technologies can process large volumes of transactions and identify instances of fraud such as multiple logins within a short time or high spending rates.

It is shown that artificial intelligence techniques reduce fraud detection time by half which suggests that businesses can use it for getting ready for Cyber Monday.

As per data, it is seen that Citibank reduced the phishing attempts by 70% by integrating Machine Learning techniques and Walmart has reduced shoplifting attempts by 25% through real time video analysis. And according to a Whitepaper by the University of Jakarta, these algorithms have shown 96% accuracy for reducing frauds for e-commerce businesses.

2. Strengthen Authentication Systems

Primary emphasis should be put on enhancing the authentication mechanisms that will help in preventing unauthorized execution of access to appropriate online accounts.

Multi-factor authentication (MFA) is commonly used for making identity verification based on factors other than the password. Businesses should implement an MFA system set up in critical areas such as exchange of monies or essential accounts, to counteract account takeover and unauthorized data access.

For example, Amazon has a feature known as “Report Suspicious Activity” which means that users are always able to report any unauthorized account activities or fraudulent emails. These active measures not only protect customer accounts but also promote confidence on the platform. Similarly, businesses can avoid the situations where scam risks originate from and provide the common reporting format in the organizations and to the clients.

3. Secure Payment Gateways

During Cyber Monday or Black Friday Sales, a large number of transactions occur on websites, making payment security critical. Cybercriminals love to take advantage of weak spots in payment processing platforms to perform a range of hacks. Consumers and businesses should deal with recognized payment providers that can provide effective methods to fight scams, such as address verification and tokenization of the payment data.

4. Utilizing Big Data for Enhanced Security:

Big data can be used to analyze fraud and risk indicators, as well as to identify and define potential threats. Through processing of large volumes of transaction data, organizations can identify a fraudulent, or suspicious transaction in advance before it becomes a significant problem.

It also means that it is possible to use Machine Learning algorithms to examine the earlier transactions to detect the suspicious accounts/behaviors that is important.

For instance, Mastercard offers online protection services such as Mastercard Safety Net. Other companies offer kind of solutions like HSBC or American Express which collected data by using network analysis and customer’s spending.

5. Regular Software Updates

Companies should ensure constant updates and removal of patches as much as possible, especially those dealing with investment, payment, or customer relationship management. Never letting complacency rule the environment of operation also ensures that all software remains up to date, thus reducing the chances of exploitation. This helps in reducing the bugs disrupting the normal flow of business and protecting against cyber-attacks.

6. Employee Training and Awareness

The most prominent vulnerability that has been closely analyzed in scam prevention is human mistake. Employees need to be informed about more recent forms of cyber threats and guidelines on how to report any scam.

Training on simple aspects such as recognizing phishing emails, suspicious-looking payment requests ,and customers’ unusual behavior can go long way in reducing the chances of scams during Cyber Monday.

Conclusion

With Cyber Monday 2024 just around the corner, businesses must stay vigilant against potential scams. The surge in transactions and the urgency to close deals create an ideal environment for cybercriminals to strike.

By leveraging AI-driven fraud detection, secure payment gateways, robust authentication systems, and regularly updated software, companies can effectively safeguard themselves against B2B Cyber Monday scams and fraud.

Proactive measures not only mitigate risks but also ensure a secure and profitable sales event, empowering businesses to navigate the challenges of Cyber Monday with confidence.