Protect Your Business From Online Fraud
With the drastic changes to everyday life that have come about because of COVID-19, consumers have adapted to the new reality and have embraced online solutions. Accompanying this uptick in online traffic is an increase in fraud.
A recent report from NuData Security, a behavioral biometrics company owned by Mastercard, reported a 17% increase in online traffic in the first four months of 2020 compared to that of 2019. Specifically, retail traffic increased by more than 57% and financial services increased by 21%. Unfortunately, there was also a 43% increase in high-risk traffic – which includes account takeover attempts and other types of misuse of online services.
The rise in both legitimate and illegitimate online behavior has shown that businesses need to be aware of fraud trends to help protect themselves and their clients.
Noted Changes to Good User Online Behavior
Given that many more consumers are spending large portions of their day from their home, patterns in their online behavior are beginning to emerge. Fortunately, NuData said that consumers are using the same devices to make online purchases which makes it easier for NuData to detect suspicious behavior.
Merchants are also looking for patterns in their transactions to detect fraud. Through NuData’s findings, merchants should be aware of a few new trends that are reflected in good user behavior during COVID-19 that might otherwise raise a red flag:
- The dollar amount of an average transaction has increased
- Consumers are making more purchases at unusual times
- Consumers are logging into their accounts more often
Fraudulent Trends to Look Out For
Not surprisingly, illegitimate online behavior has spiked amid this pandemic even in hard hit industries like travel and events that have seen less activity. According to the Federal Trade Commission, nearly 20,000 phishing attacks were reported in the first four months of 2020 and hackers have become more sophisticated. With the easy access of personal data online, fraudsters have been able to make synthetic accounts with both real and fake information.
According to Kevin Lee, digital trust and safety expert at Sift, a software security company, there are a few trends to watch out for when detecting payment fraud:
- Payment fraud is occurring mostly on phones as hackers are going to eCommerce sites and using stolen credentials to make purchases
- Criminals are taking advantage of digital wallets and gift cards as well
- Be wary of online orders consisting of big-ticket items that could have a high resale value
- Both digital and physical eCommerce businesses need to be aware they could be targets
How Can Merchants Protect Their Business?
“The good news for online businesses,” Lee says, “is that by paying attention to trends, understanding what signals to look out for and using the right technologies, they can mitigate fraud risk and continue to enable legitimate purchases.”
For merchants, that may mean having a fraud protection platform in place, such as an Address Verification Service (AVS), to confirm the cardholder’s billing address with the respective card issuer.
And if your business accepts other payment types, “pay extra attention to orders that don’t involve credit cards and remember you can contact the buyer to make sure the order is legitimate,” Lee says.
Investing in the proper security technology is key to keeping your business safe and secure. Working with the right credit card processor, like i3 Merchant Solutions, is also important to maximize secure payment solutions that protect both your business and customers’ confidential information.
Learn More About Protecting Your Business Against Fraud:
Contact us online or call 1-800-621-8931.
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