Total Ecommerce Fraud Increases, Billions Lost in 2017
Total fraud has increased by 5.5 percent from Q2 2016 to Q2 2017 according to the October 2017 Global Fraud Index from PYMNTS and Signifyd; an estimated $57.8 billion loss in the eight industries examined (estimated).
Perhaps more important however is that the methods being employed to perpetrate fraud is evolving and sellers are unprepared.
According to the report, "Account Takeover" has replaced "Stolen Financials" as the fastest growing fraud threat for ecommerce websites in 2017. While still representing only a fraction of the volume of Stolen Financials, in Q2 2017 alone, Account Takeover fraud rose by an alarming 45 percent, putting online retailers at a loss of an estimated $3.3 billion dollars.
An account takeover can happen when a criminal poses as a genuine customer, gains control of an account and then makes unauthorized transactions. Online accounts are usually taken over as a result of phishing, spyware or malware scams.
Another interesting data point from the report was that the fraud rate for transactions valued over $500 were over 22 times higher than for transactions valued under $100. Fraud rates for transactions exceeding $500 increased from 10.93 percent to 11.47 percent, while transactions under $500 showed an overall decrease in fraud rate.