E-Commerce on social media and Fraud Prevention.

Introduction.

Many people and businesses sell products through social media platforms. It's a common practice and can be quite successful. To get started, you'll typically need to create a business profile or page on the platform, showcase your products, engage with your audience, and set up a way for customers to make purchases, such as through a website or integrated e-commerce tools. Some social media platforms, such as Facebook, Instagram, and Pinterest, have introduced features and tools that enable businesses to set up online stores and sell products directly to their followers. These platforms have become important channels for e-commerce, and businesses have been leveraging them to reach their target audiences.

According to online data shared by Statista, it's estimated that in 2023 sales via social media platforms across the world will add up to $1.298 billion. The volume of e-commerce transactions and sales on social media platforms can vary greatly depending on several factors, including the popularity of the platform, user demographics, the region, and the type of products or services being sold.

Is the danger of fraud on social media different than the danger of fraud on dedicated E-Commerce sites?

The danger of fraud on social media platforms can be different from the danger of fraud on dedicated e-commerce sites, and it's not necessarily higher or lower but rather depends on various factors. Both social media and dedicated e-commerce sites can be susceptible to different types of fraud, and the risks may vary. Here are some considerations for each:

Social Media Platforms:

Informal Transactions: Transactions on social media platforms are often more informal and less regulated compared to dedicated e-commerce sites. This informality can make it easier for fraudsters to engage in deceptive practices.

Limited Buyer Protection: Social media platforms may offer limited, or no buyer protection compared to dedicated e-commerce sites that often have robust buyer protection programs and dispute resolution processes.

Seller Verification: It can be more challenging to verify the legitimacy of sellers on social media, as they may not have the same level of scrutiny and verification as sellers on dedicated e-commerce sites.

Communication-Based: Transactions on social media often involve more communication between buyers and sellers, which can be both an advantage and a disadvantage. It allows for questions and negotiation but also opens the door to potential scams.

Dedicated E-Commerce Sites:

Structured Environment: Dedicated e-commerce sites are designed for buying and selling, providing a structured and regulated environment with established rules and policies.

Verified Sellers: Many e-commerce platforms have seller verification processes, which can help ensure that sellers are legitimate businesses or individuals.

Buyer Protection: Dedicated e-commerce sites typically offer robust buyer protection mechanisms, including guarantees, refunds, and dispute resolution services.

Reviews and Ratings: E-commerce sites often feature customer reviews and ratings, providing buyers with valuable information about the reputation and quality of sellers and products.

In summary, the danger of fraud on social media can be influenced by the informal nature of transactions, the limited buyer protection, and the potential for unverified sellers. In contrast, dedicated e-commerce sites typically provide a more structured and secure environment for online shopping. However, it's important to note that fraud can still occur on both types of platforms, and buyers and sellers should exercise caution, conduct due diligence, and follow best practices to protect themselves from fraud and scams, regardless of the platform they use.

Is there an additional danger of fraud in selling through social media, since the Seller cannot apply fraud filters?

Yes, there is a potential danger of fraud when selling products through social media platforms. Social media platforms do have certain security measures and policies in place to protect users, but they may not catch all instances of fraud or misconduct. Here are some common types of fraud and scams to be aware of when selling on social media:

Fake Buyers: Some individuals may pretend to be interested buyers but have no intention of making a legitimate purchase. They may waste your time or engage in other deceptive practices.

Payment Scams: Sellers might encounter fraudulent payment methods, such as fake checks or stolen credit card information. Be cautious when accepting payments from buyers, especially if they seem unusual or sketchy.

Chargebacks: Buyers can dispute transactions, leading to chargebacks, which can be costly for sellers if they cannot prove the legitimacy of the sale.

To reduce the risk of fraud when selling through social media, consider these precautions:

Verify Buyer Information: Try to verify the identity of potential buyers and their payment information. Use secure payment methods whenever possible.

Is there an additional danger of Seller fraud on social media?

Yes, there is a danger of seller fraud on social media platforms. Seller fraud occurs when individuals or businesses engage in deceptive or fraudulent practices when selling products or services through social media. Here are some common forms of seller fraud to be aware of:

Non-Delivery Scams: Sellers may accept payment for products but fail to deliver the items as promised. They could disappear or provide fake tracking information.

Counterfeit Goods: Some sellers may offer counterfeit or fake products, misrepresenting them as genuine. This can lead to customer dissatisfaction and legal consequences.

Misleading Descriptions: Sellers may provide inaccurate or misleading product descriptions, images, or information, making it difficult for buyers to make informed decisions.

Fake Reviews: Some sellers may generate fake positive reviews to artificially boost their reputation or manipulate buyer trust.

To protect yourself from seller fraud on social media, consider the following precautions:

Research Sellers: Before making a purchase, research the seller's profile, reviews, and history of transactions if available. Be wary of sellers with limited or no online presence.

Read Reviews and Ratings: If the platform provides user reviews and ratings, read them carefully to gauge the seller's reputation and the quality of their products or services.

Why TRIO for E-Commerce on social media?

One of the major problems described above is the lack of trust between the seller and the buyer, especially on social media.

To resolve this issue TRIO introduced Privacy-Preserving Mutual Identity Verification for P2P Transactions, independent from Social Media Site. In a nutshell - the Seller publishes his TRIO Wallet Public Address, which is sufficient to initiate mutual Identity Verification, using TRIO Identity tokens.

Now if the Buyer and the Seller are willing to engage in the business transaction - they can use TRIO Retail E-Commerce solution in full security free from fraud, theft, and money laundering.

At the end the Buyer will provide his rating using TRIO reputation tokens, thus assuring its accuracy.