Various Online Frauds Hitting Retailers This Christmas
While we had no shortage of exciting times considering who “won” Black Friday and Cyber Monday, we didn’t think near so much about one other “winner” that we probably should think more about. That particular winner is one we’d all rather never see, but is making huge gains anyway: fraud.
Several factors are coming together all at once to make what may be a catastrophic fraud season: there’s the increase in online shopping that always comes this time of year anyway, which has been found to reach record-setting proportions of late. There’s the increasing sophistication of online fraud operations, including account takeover fraud. There’s even a pile of illicit data from the dark web that’s making such operations a lot easier than they once were.
Take all these factors together and it represents a potential disaster for retailers. Sourabh Kothari, Signifyd’s director of merchant advocacy, noted that the company was “…expecting an all-out assault this holiday season,” and that some unexpected targets would be part of the mix.
Naturally, Kothari detailed, high-end retailers were on the block, as they generally are. This isn’t news to a lot of people who expect said venues to be hit by retail fraud. The big new surprise this year, however, is the one that means something to us: e-commerce fraud.
Account takeover fraud is on the rise, as is stolen financials fraud, and that’s driving much greater retail fraud losses this year than were seen last year. Fraud actually declined in the higher-value markets, while soaring in the lower-value markets, not incorrectly figuring that such venues just weren’t prepared to be hit.
So what can we do? Well, the standard warnings apply. Strengthen and change your passwords, watch your statements, so on and so forth. Businesses too need to strengthen their own protection and consider putting encryption tools to work in a bid to make the potentially stolen data useless. Though some businesses are actually refusing to do business in certain high-fraud areas, the global nature of e-commerce represents a fight too big to win by just saying “no sale” in certain areas.
Vigilance and better solutions are the only real ways to fight back. Any other way is either too soft on fraud or too hard on actual business to succeed.