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Marketplace between individuals: how to protect yourself against fraud and scams?Article

January 21, 2022


The second-hand market is booming ... and still attracts crooks

A real Eldorado for new entrants as well as for pure players, the second-hand and Marketplace market between individuals is very attractive with its growth rate 25x higher than that of E-commerce! The opportunities are numerous, with a market that is already worth more than 86 billion euros worldwide, not counting used car sales.

There are two main business models adopted by the platforms in this market of transactions between individuals. These models have a direct impact on the level of risk, fraud and scams. Let's recap.

The customer-to-customer market place model known as "C2C

The role of the platform is mainly to put in contact the seller and the buyer, both private users, who will exchange directly the sold good without any other intermediary. C2C platforms generally charge a commission for this work of putting in contact and sometimes the realization of additional services, such as the secure payment or the management of the shipping by parcel.

The customer-to-business-to-customer Marketplace model known as "C2B2C

Here, the role of the platform is more important, because beyond putting people in touch with each other and offering additional services, the Marketplace plays an active role. It can verify the exact condition of the exchanged item before it is put on sale or sent to the buyer, authenticate it to avoid counterfeiting, restore it or recondition it.

C2B2C platforms often charge a higher commission because the work done is more advanced.

Thus, each business model involves different types of fraud and leaves the door open to very specific scams. For the past few years, the number of frauds and scams has been multiplying on classifieds sites and platforms between individuals, and customer service is often helpless.

What are the different types of frauds, scams and scams on marketplaces?

Identity theft and user account theft

In the case of identity theft, the malicious individual wants to use a person's personal data against their will for fraud purposes. The hacker pretends to be a known organization by using phishing. Once the user is guided to a fake merchant site, the trap closes. The hacker can recover the personal data collected and reuse it on your marketplace.

If you witness any kind of spoofing on your marketplace, it is important to collect as much information as possible, such as screenshots or page URLs, before sharing it with the appropriate authorities.

User account theft consists of taking control of user IDs and passwords through phishing, viruses and Wi-Fi networks. Sometimes, some customers are unknowingly debited with money because they had left their bank card registered. 

Counterfeiting of objects

A real scourge on the rise due to globalization, it is not uncommon to find fake toys, cosmetics, spare parts and objects. If this problem is not solved and continues to thrive, your brand image can be tarnished, and in case of serious breach of your obligations of vigilance, it can happen that your marketplace is held responsible.

Bank card fraud

On the Internet, this type of report has been growing steadily since the arrival of new payment methods. In Europe, 1.8 billion euros are stolen as a result of bank fraud every year!

Missed Calls, a fashionable scam

Is one of your users being harassed by a potential customer over the phone, but the customer doesn't answer back? This may be a well-honed technique, charging the victim for every second spent on the phone. This fraud is a real cutthroat for marketplaces users, making them an indirect culprit.

Phishing, a constant presence in our mailboxes

This technique is very similar to pharming except for one difference: the fraudster sends an e-mail inviting the victims to visit this type of website in order to obtain bank details and other personal information.

Pharming, or how to be swindled without knowing it

When a user browses a website, traffic is manipulated and confidential information is stolen. For example, a fraudster sends the victim directly to a fake platform, and then retrieves personal data. Pharming is less easy to detect than phishing, this hack being more blatant.

Malware - Beware of attachments

Malware is hostile or intrusive software with the purpose of stealing personal, financial or commercial information. The best known of them is the Trojan horse. As its name suggests, it refers to Greek mythology, the offering of the Greeks to the Trojans. This "offering" is structured in the same way as the soldiers in the story. The malware is hidden invisibly in a download folder, which when executed immediately takes control of the computer.

How to effectively protect your marketplace against fraud and scams?

Faced with these types of frauds and pure scams, it is your responsibility to protect your Marketplace as much as possible. Whether you are a historical player or not in the second hand market, here are some safeguards:

  • Arm yourself with an anti-fraud solution: a second-hand platform needs powerful tools to prevent fraud as much as possible. Alleviating your customer service with an anti-fraud solution allows you to detect any fraudulent profile and to ban them from your platform.
  • Propose a secure payment solution: in our opinion, your marketplace must be equipped with a secure payment solution between individuals. Thus, it is not the sellers who are asked to propose the payment method themselves.
  • Keeping an eye on quality control: In order to prevent mail scams, it is important to implement several features such as video proofing, shipment banner editing, and real-time tracking of package shipments.

Arm yourself effectively against these Internet pirates and you will protect your marketplace, its reputation and your users.

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