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A report published by Signifyd has predicted that US retailers will face a new era of online fraud this holiday season featuring attacks that are more abundant, more automated and more diversified in terms of techniques and targets.
Ecommerce sales accelerated during and in the aftermath of the COVID-19 pandemic, Signifyd’s data showed, and fraud in various forms accelerated with it. Signifyd’s State of Fraud Report 2021 found:
- a 146% increase in automated fraud attacks in 2020;
- a doubling of consumer abuse — including false claims that an order never arrived — in the first half of 2021;
- a 350% increase in fraud pressure — orders deemed to be fraudulent — by mid-2021.
In particular, the State of Fraud Report highlighted several types of attacks that have morphed and are likely to remain prevalent through the crucial holiday shopping period and well beyond. Those include innovations or increases in:
- account takeover
- curbside and BOPIS schemes
- false item not received claims
- return fraud
- automated card testing
- synthetic identities
- mule fraud
- promotion abuse
- unauthorized reselling.
The report notes that successful fraud and risk teams are changing their very nature in order to keep up with the rapidly evolving fraud challenges they face. The emphasis has moved away from loss prevention to a focus on optimizing the enterprise’s business potential.
The transformation of online fraud and the strategies to combat it take on a new urgency as online sales make up a rapidly growing segment of overall retail revenue.
The key message of Signifyd’s State of Fraud Report 2021 appears to be that this dynamic period of fraudulent activity is not a blip to be suffered by retailers and forgotten, but a steady state of the new normal.
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