Study reveals the changing face of online fraud
Cybercriminals are adapting to retailer success in detecting payment fraud.
According to the seventh edition of the Fraud Attack Index from e-commerce fraud prevention platform Forter, online fraud is evolving rapidly beyond the point of the transaction to accounts such as loyalty programs and abuse of return policies. Loyalty fraud has increased by 89% year-over-year, while the total dollar amount in online fraud has increased by 12% year over year.
The Fraud Attack Index also shows that fraudsters are having significantly more success in account takeover (ATO) attacks, with 1.5 million consumers whose accounts had already been compromised had additional accounts opened in their name. Fraudsters transfer funds to these accounts from their victims’ legitimate accounts. This represents a factor of two increase from the previous high.
The study also reveals that both buy-online-return-in-store (BORIS) fraud and buy-online-pickup-in-store (BOPIS) fraud increased by 23%. Coupon abuse saw an increase of 10%.
In the face of shifting online fraud patterns, Forter advises retailers to implement a continuous and automated fraud prevention and detection approach that assesses events throughout the entirety of the customer journey. In addition to focusing on chargebacks and credit card fraud at the point of transaction, retailers need to address fraud in a holistic and accurate manner across the entire customer journey.
“A clear trend in online fraud is emerging,” said Michael Reitblat, CEO and co-Founder of Forter. “The industry as a whole has done a tremendous job detecting and preventing payment fraud at the point of transaction. This eliminates the amateurs. We’re seeing fraudsters now shift their efforts earlier in the customer journey, gaining access to consumers’ accounts.”