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Where is Fraud the Worst?

Posted on 10.20.2015

You might want to keep a close eye on orders you receive from Alaska and Delaware this holiday season.

Machine-learning fraud detection provider Sift Science released a new report, titled "The United States of Fraud," which analyzed online transactions from August 2014 to August 2015 (collecting information from 1.3 million transactions that included shipping or billing addresses in the United States) and identified several interesting fraud patterns, regions, purchase ranges and profiles.

"Fraudsters are enjoying success in the ever-changing online playground as the e-commerce marketplace ecosystem grows," said Jason Tan, CEO and co-founder of Sift Science. "We continue to see fraud behavior consistent across various industries, and reveal identifying factors that help us track and score today's most advanced fraudsters for our customers. This not only helps our customers understand the risk of each transaction made on their websites, but also automate business decisions based on that risk. As a result, this data not only showcases typical fraudulent behavior, but allows some of today's premier online retailers to deliver a better customer experience to good users."

Highlights from the study include:

+ Alaska has the highest fraud rate based on billing address while Delaware has the highest fraud rate based on shipping address.

+ 3 a.m. is the worst time of day for fraud, regardless of time zone. Also, fraudsters are more likely to transact during the weekdays

+ Users identifying themselves in the 85-90 age range are two-and-a-half times more likely to be fraudsters than the average user.

+ A user with two to four accounts linked to one device is eight times more likely to be fraudulent.

+ Purchases worth $0-25 are twice as likely to be fraudulent, suggesting criminals test stolen credits cards for validity, trying low-value orders.


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