Online fraud attacks on the rise
Retailers continue to feel the fallout from online fraud, and the pressure is on as they are attacked from multiple sources.
Online fraud attacks took a toll on retailers in late 2017, with returns abuse spiking 119%, and policy abuse increasing 93% in the fourth quarter alone, according to the “Fraud Attack Index” from Forter.
The fraud prevention software company detected more than 200,000 policy abusers. Worse, repeat offenders attempted to conceal their identities and strike again.
“Repeat offenders continue to be an ongoing issue for online merchants. As online marketplaces expand, fraudsters are finding more vulnerabilities to exploit and strengthen their method of attack in order to best source their illicit incomes,” the report revealed.
Account takeovers (ATOs) were also prime booty for cyber-criminals in 2017, as incidents jumped 53% year-over-year in the third quarter of 2017. The good news however, is that the fourth quarter saw a slower growth of 8%, and by the first quarter of 2018, there was a 0.6% decrease in ATOs.
However, retailers should not be fooled by this decrease, as identity fraud is also declining. While this should be good news, fraudsters have figured out that stealing one’s account is more profitable than stealing an identity, making ATOs the crime of choice, the study revealed.
Some online retail segments are also more lucrative for thieves than others. For example, the beauty industry saw an uptick in fraud in Q3 of 2017 with an 186% increase of fraud attacks, followed by 167% in digital goods. Electronics lagged behind at 66%, followed by 60% in food and beverage, jewelry and luxury (38%), and apparel and accessories (7%).
“The customer journey includes more than just the point of transaction and checkout. From the moment a customer logs onto a website, to redeeming loyalty points or entering a coupon code, their shopping journey is rich and simultaneously vulnerable to new methods of exploitation.,” the study explained.
“Retailers must look to their fraud teams and solution providers to create a more robust preventative solution and stem these growing methods of attack,” the study said. “While simultaneously ramping up their defenses, online retailers should ensure that their fraud prevention mechanisms do not create friction for their shoppers. Cart abandonment is becoming a growing issue for retailers, as friction-filled checkouts cause shopper drop off.”
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