Online Fraud Soared 30% In 2017, Double The Rate Of E-commerce Sales. According to U.S. Census Bureau data, eCommerce sales climbed to a record high of $453.5 billion in 2017, representing a 16% increase over the previous year. However, recent Experian reports revealed that online shopping fraud rose 30% year over year, and 63% of businesses acknowledge they are experiencing the same or more fraud than a year ago. Chargebacks911, a leading dispute mitigation and loss prevention firm, warns that rising card-not-present (CNP) fraud could offset revenue gains unless merchants take proactive steps to identify, prevent and control it.
Though the U.S. transition to EMV technology has helped reduce point-of-sale (POS) card fraud, CNP fraud has continued to escalate. Javelin Strategy & Research projected that POS losses would decline from $6 billion to just under $5 billion between 2014 and 2018, while CNP losses were expected to almost double over the same period—from $10 billion to nearly $19 billion. Another Javelin study found that identity fraud claimed a record 16.7 million victims in 2017, with CNP fraud proving to be 81% more likely than POS fraud.
Meanwhile, Experian’s research reflected the challenges merchants face in trying to manage that fraud: 72% of businesses cite fraud as a growing concern, 71% admit to denying more transactions than they should, and 84% believe the need for fraud risk mitigation could be reduced if they were certain of customers’ identity. Merchants are also getting mixed messages from consumers: 66% of shoppers favor security protocols for online transactions because it makes them feel protected, yet 35% say they would transact more online if there were fewer security hurdles—and 1 in 4 has abandoned a transaction because creating a new account required too much information.
“Online retailers have reason to be excited by the latest eCommerce sales figures, but they also need to follow CNP fraud trends to understand the net impact on their bottom line,” explained Monica Eaton-Cardone, co-founder and Chief Operating Officer (COO) of Chargebacks911. “It’s critical to have an effective loss-prevention program in place to ensure fraudsters aren’t the ones getting rich off your sales and marketing investments. However, that’s not all you need to do. It’s equally important to continually review and reassess those anti-fraud measures to stay ahead of criminals’ evolving tactics and the many different types of potential losses, from identity theft to chargeback fraud.” Online Fraud Soared 30% In 2017, Double The Rate Of E-commerce Sales.