Navigating the Treacherous Waters of E-Commerce Fraud: A Call to Action for CSPs

As e-commerce becomes a staple in our digital lives, it brings with it an unwelcome guest: e-commerce fraud. This growing challenge affects millions of online transactions, undermining consumer trust and causing significant financial losses. E-commerce fraud, characterized by deceptive practices such as identity theft and fake transactions, is evolving rapidly in sophistication. In this blog, we delve into the complexities of this issue, highlighting the critical role of Communication Service Providers (CSPs) in combating these digital threats and ensuring a safer online shopping environment.

The Problem of E-Commerce Fraud

E-commerce fraud, a pervasive issue in the digital marketplace, manifests through a variety of deceptive practices that manipulate online transactions. This type of fraud ranges from identity theft and unauthorized transactions to intricate phishing scams. The financial impact of e-commerce fraud is alarming. In 2022, retailers missed out on approximately $41 billion due to fraudulent activities, with predictions indicating a disturbing upward trend in the coming years. Its impact is far-reaching, not only causing significant financial losses but also eroding consumer trust and tarnishing the reputations of businesses. This alarming trend underscores the critical need for effective countermeasures to protect both consumers and businesses.

A Case Study in E-Commerce Fraud: Facebook Marketplace

The Facebook Marketplace fraud case vividly illustrates the complex nature of e-commerce fraud and the sophisticated methods employed by fraudsters:

Creation of Multiple Fake Accounts: Fraudsters create several bogus accounts on Facebook, posing as legitimate users. These accounts are then used to list items, typically household electronics and appliances, for sale.

Listing Items at Attractive Prices: By listing these items at prices well below market value, fraudsters quickly attract potential buyers. This tactic creates a false sense of urgency and an illusion of a great deal.

Exploiting Trust with a Military Persona: Often posing as military, these scammers exploit the inherent trust and respect typically given to military members, adding a layer of credibility to their scam.

Demanding Advance Payment Without Delivery: The fraudsters persuade buyers to pay in advance, promising that the items will be delivered subsequently. However, once payment is received, they cut off all communication, leaving the buyer without their money and the item.

Providing Fabricated Shipping Information: To further the illusion of legitimacy, scammers may provide fake shipping details or tracking numbers, misleading buyers about the delivery status of their purchase.

Utilizing Phishing Links and Malware: In more nefarious scenarios, scammers may send phishing links or malware disguised as special offers, tricking buyers into revealing personal information or downloading harmful software.

The underlying mechanism of this type of fraud is the use of the same name across multiple mobile numbers registered under different identities, making it challenging to track and identify the fraudster due to the constant shifting of their identity and contact points.

The Role of CSPs in Combating E-Commerce Fraud

CSPs are uniquely positioned to play a critical role in the fight against e-commerce fraud. With their extensive access to network data and technological resources, CSPs have the capability to detect and prevent fraudulent activities before they inflict significant damage. Here are some key strategies that CSPs can employ:

Social Media Analysis: CSPs can use advanced data analytics to monitor social media platforms. By analyzing patterns of communication and user behavior, they can detect anomalies that may indicate fraudulent activities. This includes identifying suspicious account creation trends, monitoring for messages or posts that match known fraud schemes, and flagging unusual spikes in activity related to e-commerce transactions.

Blacklisting Fraudulent Points of Activation and Interaction (POA/POI):

  • Points of Activation (POA) refer to the locations or channels where services (like mobile connections or internet services) are activated. Fraudsters often use fake or stolen identities to activate services which are then used for fraudulent activities.
  • Points of Interaction (POI), on the other hand, are the points where customers interact with the service, like making calls, sending messages, or using data.

CSPs can track and blacklist both POAs and POIs that are identified as being part of fraudulent activities. By doing so, they can disrupt ongoing fraud schemes and prevent the misuse of telecom services for illicit purposes.

Link-Based and Location-Based Analysis: CSPs can utilize link analysis tools to uncover networks of fraudsters. By examining the connections between different phone numbers, IP addresses, and physical locations, they can identify patterns and clusters of fraudulent activity. Location-based analysis also helps in pinpointing the geographical hotspots of fraud, enabling CSPs to focus their monitoring and countermeasures in these areas more effectively.

Monitoring for Suspicious Activations: CSPs can focus on monitoring activations, especially from locations known for high rates of fraud. By keeping a vigilant eye on new account activations, SIM swaps, and other telecom activities, CSPs can quickly spot and investigate suspicious patterns. This proactive monitoring helps in early detection of potential fraud rings before they can cause widespread harm.


As e-commerce continues to grow, the threat of fraud evolves alongside it. However, through diligent efforts, innovative strategies, and collaboration between stakeholders, including CSPs, e-commerce platforms, and consumers, it is possible to create a more secure online shopping environment. The battle against e-commerce fraud is ongoing, and vigilance is key to safeguarding the interests of all parties in the digital marketplace.

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