Two new fraud studies have confirmed that while EMV chip cards are preventing breaches at point-of-sale (POS) terminals at retail stores, fraudsters continue to turn their attention to online crime. In fact, card-not-present fraud has become 81% more likely to occur than POS fraud.
One report, the 2018 Identity Fraud Study released today by Javelin Strategy & Research, found that in 2017, the total number of fraud victims increased 8% to 16.7 million. The Javelin report also found that 6.64% of consumers became victims of identity fraud last year, an increase of almost 1 million victims from the previous year. The increase was driven by growth in existing non-card fraud and account takeover (ATO) schemes.
In one of the more damaging iterations of an ATO, a fraudster takes over a person’s account, commits the crime and then changes the account back before the security people or the victim even know what’s happened. Javelin found that total ATO losses reached $5.1 billion last year, a 120% increase from 2016. Victims pay an average of $290 out-of-pocket costs, and spend 16 hours on average to resolve an ATO event.
"Criminals are also gaining access to mobile phones and using the information they find on the victim’s phone to conduct a transaction on another account," says Al Pascual, senior vice president, research director and head of fraud and security at Javelin.
The other study, the 2017 Fraud Index released by Radial last week, found a four-times increase in digital gift card attacks from Thanksgiving to Christmas this past season. In addition, overnight shipping remains a popular actor vector for fraudsters. Radial tracked $1 of fraud for every $13 in purchased goods shipped.
"I think companies have to face that staying ahead of the fraud has become a full-time job, it’s not something you can have your customer service people work in in their spare time," says KC Fox, vice president of payments, tax and fraud at Radial.
Short of that, here are some tips that Javelin’s Pascual offers to prevent fraud: