Report: Fraud attacks spike over past four quarters
Cyber-criminals have been wreaking so much havoc among retailers that there has been a 137% jump in fraud attacks over the past four quarters, an issue affecting $7 out of every $100 of retail sales, according to the latest PYMNTS.com Global Fraud Attack Index.
The report, compiled with fraud detection and protection technology vendor Forter, measures the rate of fraud attempts made on U.S. online merchants, and monitors trending changes. It also examines the types, sources and geography of fraud attacks, as well as the potential cost to merchants, if these attempts remain undetected.
According to the report, there was a significant increase in the rate of fraud attacks throughout 2015 and the first quarter of 2016. For every 1,000 transactions made in the first quarter of 2016, there were 34 fraud attacks, compared to 15 per 1,000 transactions during the second quarter of 2015, which represents a 126% increase. The attack rate also rose from quarter-to-quarter, increasing 11% between the third and fourth quarters of 2015, and rising 26% from Q4 2015 to Q1 2016.
While a majority of industries were victimized, digital goods was the hardest hit with a 186% spike, followed by food and beverages with a 116% jump, the report said. Only one industry, clothing, saw fraud attacks diminish (19%). Meanwhile, the Index found that $10.50 out of every $100 spent across both the digital goods and luxury goods segments is at risk, the report said.
This excessive fraud is being blamed on increasingly sophisticated intrusion methods, including botnets, or a collection of computers infected with malware and taken over by fraudsters. From Q2 2015 to Q1 2016, botnet incidents surged from seven attacks per 1,000 transactions to 27 per 1,000 transactions, the Index said. Worse, by the end of 2015 and the start of 2016, botnets accounted for 82% and 79%, respectively, of all attacks, the Index said.
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