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(From Credit Union Times) – Payments fraud is getting more sophisticated, and criminals are increasingly turning away from high-volume, indiscriminate attacks, according to new research from e-commerce fraud-prevention company Forter.
The firm’s analysis of over $140 billion in e-commerce transactions found that loyalty fraud attacks — whereby criminals steal customer points and perks from merchant-related accounts — increased by a whopping 89% between the second quarter of 2018 and the second quarter of 2019. Up 23% were schemes in which criminals made in-store returns of items they bought with stolen card information or posed as their victims in order to pick up those items in store.
In addition, instrument manipulation attacks — where criminals attempt to take over victims’ computers — increased by 15%, attempts to steal personally identifiable information rose 30% and coupon abuse went up by 10%. The total dollar amount of online fraud climbed by 12% during the period.
“A clear trend in online fraud is emerging,” Forter CEO and co-founder Michael Reitblat said. “The industry as a whole has done a tremendous job detecting and preventing payment fraud at the point of transaction. This eliminates the amateurs. We’re seeing fraudsters now shift their efforts earlier in the customer journey, gaining access to consumers’ accounts.”
“A second trend shows that fraudsters are diversifying into softer currencies that are not primarily financial and moving beyond transactional credit card fraud into areas such as loyalty account fraud and policy abuse,” Reitblat added.
Criminals are now investing in higher-quality, targeted attacks, and they have the means to do so thanks to the wealth of personal data at their disposal, the Forter report noted. Fraudsters are also paying more attention to account-based vulnerabilities instead of traditional transactional fraud, largely because growing consumer expectations of quick, seamless shopping experiences have prompted many merchants to streamline their checkout processes in ways that have created exploitable vulnerabilities.
According to the data, fraud attacks spiked 61% between the second quarter of 2018 and the second quarter of 2019 in the air travel industry — the highest of any industry, Forter noted. Fraud attacks also increased 50% year-over-year among variety retailers, rose 48% for cryptocurrency and jumped 44% in the apparel and accessories sector. It also rose 41% in the food and beverage industry, 38% in land travel and 5% for electronic goods and jewelry.
However, fraud attacks in the home and garden industry fell 50% year-over-year, largely due to difficulties coordinating in-store pickups for large items. Fraud attacks in the beauty business were down 36%, and fraud attacks in the hotel, digital goods and marketplace sectors fell by 10% to 24%, according to the data.