Fintech Latest News North America

Fraudsters Attempted to Purchase 70% More Expensive Orders in October and November Compared With 2019 

The average value of items attempted to purchase by fraudsters rose to over $700 between October and November this year, marking a 70% year-on-year increase in comparison to the same period in 2019. That’s according to San Francisco based internet researcher Sift’s, Q4 2020 Digital Trust and Safety Index.

The news marks a shift in the tactics of fraudsters who Sift say, typically make numerous lower value transactions with stolen payment information, on the assumption that some will be unsuccessful. 

Bad actors are making larger, albeit fewer, attacks and over the holiday period, the focus is on eCommerce merchants as scammers look to cash in on the surge of online shopping.

Jason Tan, CEO of Sift, said: “The opportunity for e-commerce merchants this holiday season is greater than ever, and fraudsters have certainly taken advantage by making fraudulent transactions at higher price points.

One area hit particularly hard by cybercriminals, who try and avoid the checks in place for higher-value targets, is the food and beverage sector. This year the value of attempted fraudulent orders surged to over 475% of October and November’s average for 2019, as fraudsters looked to exploit restaurants’ and delivery services’ Black Friday Weekend deals.

“Cybercriminals are well aware that merchants are setting higher thresholds for blocking transactions, which is a major flaw of rules-based fraud prevention strategies. These rules-based systems not only fail to catch large amounts of fraud but block legitimate transactions in the process. Companies need to move towards a Digital Trust & Safety strategy, which accounts for the changing behaviours of fraudsters while ensuring a seamless experience for legitimate users,” said Tan.

As high street retailers struggled through the pandemic, online retailers saw a boom in sales as people isolated in their homes. Sift reported the daily average order amount between April and November 2020 for eCommerce retailers as 9% higher than the same figures for the 2019 Black Friday weekend.

Online shopping also increased significantly over the last weekend of November with eCommerce order volumes increasing by 64% compared to the daily average for the whole of 2020.

Author

  • Gina is a fintech journalist (BA, MA) who works across broadcast and print. She has written for most national newspapers and started her career in BBC local radio.

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