In 2017, U.S. ecommerce sales experienced 16% growth. Unfortunately, this growth was outpaced by a 30% rise in online shopping fraud. Recent research produced by Javelin Strategy & Research has revealed that the number of identity fraud victims increased by 8% (rising to 16.7 million US consumers) in the last year.
The complexity of fraud has risen considerably, with a notable change in how these frauds are committed. For example, criminals are choosing to open more new accounts to compromise consumer’s accounts. It has also been pointed out that the adoption of EMV cards and terminals has continued to push fraud online and out of physical stores. While credit cards are still the most prevalent targets for new account fraud, new intermediary accounts like email payments (e.g. PayPal) and other internet accounts (e.g. Amazon) are being used by fraudsters more and more frequently.
The study also picked up on significant changes in data breaches that took place last year: 30% of consumers were notified of a breach in the past year (up from 12% in 2016), and social security numbers (35%) were compromised more than credit card numbers in data breaches (30%).
“2017 was a runaway year for fraudsters, and with the amount of valid information they have on consumers, their attacks are just getting more complex,” says Al Pascual, senior vice president, research director and head of fraud & security, Javelin Strategy & Research.
He went on to caution, “Fraudsters are growing more sophisticated in response to industry’s efforts to implement better security. Fortunately, there are a variety of digital tools that consumers can leverage to stay better informed on the status of their identities and accounts, and to ultimately stay better protected.”
And merchants? What can you do to protect your business and customers? The key is to find a payment processing provider that offers safe services and chargeback protection and prevention programs. The annual 2018 Identity Fraud Study also provides a comprehensive analysis of identity fraud trends you should watch out for this year:
- The record high incidence of identity fraud – In 2017, there was an increase (6.64%) of almost one million identity fraud victims from the previous year.
- Account fraud spiked significantly – account take over continues to be the most challenging fraud type, reaching $5.1 billion (a 120% increase from 2016).
- Online fraud shopping is the greatest fraud opportunity for criminals. Card-not-present (CNP) fraud is now 81% more likely than point of sale fraud, according to Javelin.
- Fraudsters are becoming more and more sophisticated. Fraudsters continue to use more complex and difficult to detect monetization schemes.
Author Bio: Electronic payments expert Blair Thomas co-founded eMerchantBroker, serving both traditional and high-risk merchants. His passions include producing music, and traveling.