Study: E-commerce fraud increases more than 30% in 2016
As the industry makes the switch to EMV, data breaches and automation are driving online fraud more than ever.
In fact, e-commerce fraud attack rates have spiked 33% over the last year, according to the “2016 E-commerce Fraud Attack Rates,” from Experian. The report analyzed millions of e-commerce transactions and ranked the top states, cities and ZIP codes for shipping and billing fraud across the United States.
As EMV works to protect payment card information at store level, the process has prompted fraudsters to refocus their efforts online. By targeting card-not-present transactions, hackers are gaining access to consumer accounts, billing information and identity data, enabling more successful fraudulent attempts.
And fraud is happening everywhere across the country.
Broken down by region, billing fraud has increased 25% in the West, with shipping fraud jumping 32%. In north central U.S., billing fraud increased 16%, while shipping fraud spiked by 32%.
In the south, billing fraud attacks increased 32%, and shipping fraud jumped 41%. The Northeast reported billing attacks increase 25% while shipping fraud was up 44%.
Overall, 10 states — Alaska, Colorado, New Mexico, Idaho, North Dakota, Maine, Montana, Iowa, South Dakota, and Wyoming — saw an increase of over 100% in shipping fraudulent orders.
Meanwhile, Delaware, Oregon, and Florida, were the top-ranked states for billing and shipping e-commerce fraud in 2016. Both Oregon and Delaware saw an increase in e-commerce billing fraud attacks of over 200%. Three states, Florida, California and New York, accounted for more than 70% of total e-commerce billing fraud attacks.
South El Monte, California, was the top ranked city for both shipping and billing fraud in 2016. The billing fraud attack rate was nearly double that of the second-ranked city, Port Reading, New Jersey.
Miami, was home to the most ranked ZIP codes for e-commerce fraud, accounting for 17 of the top 100 for shipping fraud, and 20 of the top 100 for billing fraud, the report said.
"One of the major drivers for the increase in fraud attacks is the contin-ued adoption of EMV terminals for chip-and-pin credit cards,” said Ad-am Fingersh, Experian general manager and senior VP of fraud and identity solutions.
“While these cards reduced counterfeit credit card fraud at the point-of-sale, they have driven fraudsters online. This pattern is similar to what other EMV markets saw when transitioning to chip-and-pin cards," said Fingersh. "As more compromised data becomes available from breaches, it's easier for fraudsters to get their hands on identity data requiring con-sumers and businesses to stay diligent in protecting themselves."
Hipster brand opens outpost in Brooklyn
Shinola, the Detroit-based watch and leather goods brand with a cool edge, has expanded its presence in New York City.
The company has opened a store in the newly developed Empire Stores center in Brooklyn. The sprawling, renovated warehouse complex is located on the waterfront and is home to tech and advertising companies along with select retailers, including West Elm.
The new store features Shinola’s full collection of watches, jewelry, leather goods and bicycles, along with a customizable watch bar. The brand partnered with New York eatery Smile Café to open an on-site restaurant.
The 2,651-sq.-ft. store was designed in collaboration with Gachot Studios, which is also designing the upcoming Shinola Hotel in Detroit.
It was built by Schimenti Construction.
Shinola Brooklyn is the company’s 18th nationwide. Additional stores are due to open in downtown Manhattan, Denver, Dallas, and Troy, Michigan.
Retailers launch new push against border tax
The retail industry is ramping up its efforts against House Republicans’ proposed border-tax proposal.
The National Retail Federation has launched the next phase of a television and digital ad campaign against the tax, which is included in the House Republican tax reform plan.
The campaign features three small retailers who tell their own stories and convey their fears that the BAT would put them out of business.
“Small business owners are already struggling to survive in an over-regulated marketplace, and the border adjustment tax would push many of them under water,” said David French, NRF senior VP for government relations.”
French said that the three retailers featured in the campaign represent “the millions of Americans who have made enormous sacrifices to build their businesses and now are at risk of being taxed out of existence.“
“Their stories are powerful not just because they are real, but because their fears transcend regional and partisan politics,” he said.
The ads will begin with a two-week television and digital ad buy in the congressional districts of several Republican members of the House. The ads will launch in several communities across the country and will encourage viewers to go to stopthebat.tax to tell their members of Congress to oppose the BAT.
The BAT is included in the House Republican leadership’s “Better Way” plan for tax reform. While NRF said it strongly supports tax reform, it warned the BAT could cause retailers to see tax bills three to five times the amount of their profits. Most at risk, according to the NRF, would be the small retailers that make up 98% of the retail industry and provide 40% of its jobs.