Multichannel Merchant
  • Ecommerce
  • Marketing
  • Operations & Fulfillment
  • Sector Spotlights
Subscribe / Advertise
HOME
  • Ecommerce
    • Marketplaces
    • Mobile
    • Payment
    • Security
    • Shopping Cart
    • Usability
  • Marketing
    • Advertising
    • Catalog
    • Content Marketing
    • Email
    • Search
    • Social
    • Video
  • Operations & Fulfillment
    • Contact Center
    • Customer Experience
    • Delivery
    • Distribution Center
    • Fulfillment
    • Order Management
    • Returns
    • Shipping
    • Workforce
    • Sector Spotlights
  • Resource Center
    • Media & Marketing Events
    • MCM Advisory Board
    • Media Kit
    • Podcasts
    • Webinars
    • Research
    • Submit A Release
    • Videos
    • Jobs

Follow Us

Facebook
LinkedIn
Twitter
YouTube
  • Subscribe
  • Advertise with Us
  • Subscribe
  • Advertise with Us

Ecommerce Fraud Risk Was Up 79% During Holiday Season

Mike O'Brien
March 9, 2017

Fraud prevention technology provider Forter has published its 2017 Fraud Attack Index, in conjunction with the Merchant Risk Council (MRC). It detailed the rate at which ecommerce fraud attacks increased throughout traditional retail verticals and provided an in-depth look at the reasons behind the year-over-year changes.

One of the key findings was a 79% increase in the risk of fraud for domestic holiday orders when compared with 2015.

To learn more about the report and its findings, Multichannel Merchant reached out to Forter CEO Michael Reitblat.

MCM: What were the drivers of the 79% spike in fraud risk for holiday 2016?

Michael Reitblat: It was partly friendly fraud, and partly fraudsters using the holiday rush to hide among the good customers. Friendly fraud is becoming a serious problem with serial offenders sharing tips online. Fraudsters know that teams relying on manual reviews are burdened in the holidays especially, struggling to keep up with the flood of orders; they take advantage of it, hoping to slip through.

MCM: How is the fraud rate determined?

Michael Reitblat: It’s calculated including both successful fraud (resulting in chargebacks) and unsuccessful fraud that was blocked.

MCM: Talk about the 13% decline in the cross-border fraud attack rate and why it’s different from domestic.

Michael Reitblat: More international orders, which many sites have experienced, have led to the fraud rate going down relative to the good orders. It’s always different from domestic because the fraudster types, methods and patterns are different. And despite the 13% decrease, international orders were found to be 62.4% riskier than domestic ones in 2016.

MCM: Why are merchants willing to take the risk in cross-border, and why is the risk substantially higher than domestic, even with the year-over-year decline?

Michael Reitblat: Merchants are still willing to take the risk because of the potential gain – a recent DHL study found merchants can increase their sales 10%-15% by setting up for international orders. Forter has even seen clients increase by more than that, by optimizing a site for international traffic. It’s worth their while managing a higher fraud attack rate, for that kind of increase. You just need to step up your international fraud prevention efforts, becoming as good at the buyer patterns of target market countries as you are at US patterns.

MCM: Talk about the shifts in merchant account takeover (ATO) and payment ATO activity in 2015 vs. 2016.

Michael Reitblat: The shift from ATO against merchant sites to ATO against online payment accounts is an interesting development. It’s an example of the speed at which fraudsters adapt to moves made to stop their attempts. Merchants realized that ATO was a problem, and started guarding against it – so fraudsters shifted, using similar tactics against online payment accounts, which is far harder for merchants to spot, and which in any event gives them greater scope for theft.

MCM: Overall what is your assessment of the state of fraud risk in 2017?

Michael Reitblat: We’ll have to see. Things have moved fast over the last year or two, with EMV, the growth of mobile and electronic payments, and the growth of e-commerce generally. It’s an interesting time. Specifically ATO is a strong trend and it’s unlikely we’ll see that going anywhere, though the accounts targeted may shift. Apparel sites will likely start getting serious about fraud prevention, prioritizing it in the way that luxury goods sites had to do. One thing about fraudsters – they’re highly creative when it comes to finding new ways to steal. You can’t take your eye off the data!

In addition, here is Forter’s analysis of the change in fraud risk between 2015 and 2016 across different retail categories:

•          Apparel – 69.9% increase

•          Luxury – 8.4% decrease

•          Digital Goods – 22.6% decrease

•          Electronics – 1.8% decrease

•          Travel & Hospitality – 33% decrease

•          Food and Beverages – 49.8% increase

RELATED TAGS: Fraud

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Webinars

Unleashing GenAI Magic: Transforming Visual Commerce for Unbeatable Customer Experiences

Returns Challenges, Opportunities Covered in New Webinar

Multichannel Merchant: Editorial Spotlight on Returns in 2023

Webinar: The Generative AI Genie is Out of the Bottle

Are Retailers Ready to Address Sustainability?

Latest Research

Goods-To-Person in E-Fulfillment: Flexing Along With Demand

Goods-To-Person E-Fulfillment Technology: Flexing Along With Demand

Foreign Trade Zones: A Hidden Gem for Retailers

Automation and Robotics: Moving Past Limitations to Gains

Shipping Capacity Management: The Outlook for 2022 Peak Season

Blogs

Why Digital Wallets are The Key to Modern Loyalty Marketing

ESG and Your Supply Chain: 3 Steps to a Streamlined Strategy

Retail Cyber Threats: 5 Ways to Protect Your Business

Key Factors in Choosing the Right 3PL For Your Business

A Multi-Carrier Approach Is Key During Disruptive Times

About us

  • About us
  • Press Releases
  • Privacy Policy
  • Diversity Inclusion & Equity
  • Accessibility Statement

Advertise

  • Media Kit

Events

  • Media & Marketing Events

Related Sites

  • Chief Marketer
  • Event Marketer
  • LeadsCon
  • LeadsCouncil
  • PR News

Directories / Jobs

  • MCM Source Directory
  • Top 3PLs
  • Jobs

Sign up for MCM

Get the Ecommerce, Marketing & Operations info you need when you need it.
  • About us
  • Advertise
  • Jobs

Follow Us

© 2023 Access Intelligence, LLC - All Rights Reserved.