The good news is US Black Friday weekend holiday sales grew an estimated 19.7% according to Adobe Analytics. The bad news according to LexisNexis® Risk Solutions (LNRS) is that fraudulent sales grew substantially as well, including a big jump in cyberattacks by bots and mobile transaction fraud.
Among the Black Friday weekend sales fraud highlights reported by LNRS were:
- increased fraud by bots using mobile devices to open new fraudulent accounts with one US payment processor reporting a 2,000% increase in bot traffic
- average fraudulent cart size was $329, nearly triple the size of legitimate sales carts at $118
- payments surged as fraudsters and consumers used mobile for 64% of purchases; one payments processor reported holiday mobile fraudulent payments doubled compared with average rates
- fraudulent mobile transactions grew 12% over last year but desktops still lead with 3.4% fraudulent transactions compared to 1.4% for mobile
- the global threat is growing with fraudulent holiday transactions recorded from Russia, Belarus, China, Vietnam, and South Korea, as well as the US.
“Cybercriminals are opportunity seekers and travel paths of least resistance, shifting their focus based on consumer patterns,” said Kim Sutherland, vice president of Fraud and Identity Market Planning at LexisNexis Risk Solutions. “As consumers ramp up their purchase volumes and increasingly utilize mobile devices to transact, data shows that fraudsters will likely continue to progressively target mobile and with higher dollar fraud.”
LNRS is not the only company to identify potential fraud loss as iovation estimates 15% of total US Thanksgiving holiday long weekend online sales were potentially fraudulent.
The cost of fraud is also substantial as LNRRS estimates for every dollar lost to fraud, retailers and e-commerce merchants incur an additional $3.13 on average in related costs including lost revenue, chargeback fees, merchandise redistribution, and other expenses.
Cyberattacks by bots growing relentlessly
The latest cybercrime Report released by LexisNexis® Risk Solutions further reveals the fraud trends based on nearly 17 billion digital transactions worldwide in the first six months of 2019, including the 62% of digital transactions originating from a mobile device.
The data presents a challenging time for online businesses as you can see in the following highlights:
- 277 million human-initiated cyberattacks, up 13% in just six months
- 111 million mobile attacks, rising nearly 10% during that same timeframe
- 171% year-over-year growth in bot-based account creation attacks against retail e-commerce
- A 144% surge in mobile app registration fraud across banking, media and more
- A 52% jump in payment attacks in North America, compared to 12% globally.
“Fraudsters no longer operate in silos, they are attacking across industries and organizations,” said Rebekah Moody, director of fraud and identity at LexisNexis Risk Solutions. “As seen by a detailed example in the report, one fraudster can carry out a large number of transactions against a series of global organizations using a single mobile device.
“In the end, corporations benefit the most when fraud defense platforms include a multilayered approach that comprises digital identity intelligence, physical identity, and authentication capabilities,” Moody added. “This approach, when executable in near real-time and touching the entire customer journey, extends beyond detecting complex fraud – it also allows for more streamlined regulatory compliance processes and reduces friction across the customer experience.”
If merchants aren’t more proactive about cybercrime protection, particularly in mobile transactions, bots could be the Grinch that stole Christmas profits in 2019.
You can download a free copy of the LexisNexis Risk Solutions 2019 Cybercrime Report here.
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