web and mobile fraud
30 per cent increase in online fraud
Christmas has come early for Internet scammers as brand new benchmark research estimates a 30 per cent increase in online fraud attempts in the last 12 months.
Data from ACI Worldwide based on hundreds of millions of transactions from large global retailers operating in Europe and the US, reveals a significant increase in attempted fraudulent transactions as well as new types of fraud.
2015 saw a significant increase in card-not-present (CNP) fraud attempts; one in 86 transactions was a fraudulent attempt versus one in 114 transactions in 2014.
This equates to a 30 per cent increase compared to the previous year as consumers shop with more devices online. Fraud attempt rates by value have also increased by 33 per cent.
Jackie Barwell, Director, Fraud Product Management, ACI Worldwide, said: “When it comes to online fraud, Christmas 2015 is likely to be among the riskiest seasons retailers have ever seen; it is therefore critical that they prepare for a significant upturn in fraud, particularly within eCommerce channels.
“The shift to more secure EMV chip cards in the US is one of the key factors contributing to an increase in online fraud attempts globally. Retailers have been busy tightening controls on card present transactions, and fraudsters are increasingly looking at eCommerce channels instead, for their fraudulent attempts.”
“Consumers need to be more vigilant than ever during this holiday shopping season. No one is immune to fraudulent attacks as some of the high profile data breaches in recent weeks have shown. Stealing and reselling data from ordinary consumers is now a highly organised criminal activity and fraudsters have been finding ever more sophisticated ways to hack databases or obtain data from individual consumers via social engineering and phishing activities.
The past year has also revealed new paths to fraud, due to the increase in omni-channel shopping options. The data reveals that digital downloads (virtual gift cards or eGifting) have the highest attempted fraud rate at 9.55 per cent, followed by online purchase with next day/overnight delivery at 6.57 per cent. Fraud rate attempts for international online orders stood at 2.38 per cent, and buy online/pickup in store 2.15 per cent.
Buy online/pick up in-store attempted fraud rates are expected to increase by 28% this holiday season (partly as a result of EMV being deployed within the card-present environment).
Jackie Barwell adds: “Our findings suggest that merchants must be even more vigilant and shore up eCommerce fraud protocols. We can’t overstate the benefit of a targeted risk strategy based on peak holiday periods to ensure maximum revenue while also minimising false positives. It is also critical for retailers to implement a real-time fraud solution, which continuously monitors fraud behaviour and trends across all channels, both online and in-store.”
