As more consumers gravitate to the web to shop during the pandemic, fraudsters have, unfortunately, followed. Globally, the fraud attempt rate based on transaction value rose by 13% to 4.3% in April 2020, up from 3.8% one year earlier, according to an analysis of hundreds of millions of transactions from online retailers across the globe by ACI Worldwide. However, that increase was significantly smaller than the 43% spike in fraud attempt value in March, when the rate reached 5.3% (as compared to 3.7% in March 2019).
number of e-Commerce purchases climbed 23.5% from April 2019 to April
2020 based on like-for-like merchants, according to ACI Worldwide. In its
definition of e-Commerce, ACI Worldwide includes digital downloads, gaming,
ticketing, travel and online dating as well as general retail. Among those
categories, general retail had the highest growth in transaction volume at 209%
year-over-year for April.
when e-Commerce customer requests a chargeback or credit card reversal under
false pretenses, also have been on the rise, climbing by 25% in March as
compared to the same month last year. Examples include untrue claims that purchases
were not received, a digital service was not ordered, or a product was
defective or damaged.
continue to use the disruption to the status quo to target unsuspecting
consumers and unprepared businesses,” said Debbie Guerra, Executive VP of ACI
Worldwide in a statement. “While vigilance is paramount,
merchants also need to ensure that they are scrutinizing their fraud strategies
to quickly adapt to a highly dynamic new retail environment.”
Changing shopping patterns can present opportunity for fraudsters, she added. “Consumers are increasingly making use of click-and-collect options because of convenience and safety — but these changing patterns also attract fraudsters, resulting in a significant uptick in attempted fraud,” said Guerra.
As consumers continue to experience financial difficulties, retailers also should be prepared for an increase in friendly fraud chargebacks as well as credit card and identity theft resulting from phishing scams, according to ACI.