Fraud attacks on the rise for online U.S retailers

By

Jennifer Braun

Published
Mar 2, 2017

U.S. online retailers consider yourselves warned. Domestic online fraud attacks are on the rise, according to findings from the 2016 Fraud Attack Index published by Forter in partnership with the Merchant Risk Council.
 
According to the report, the apparel industry has been hit the hardest, garnering a 69.9 percent increase in fraud attacks in 2016. The report also noted that there was a 79 percent increase in risk of fraud for domestic holiday orders in 2016.
 

Still, Forter analysts say they are not surprised by the increase. Pointing to the October 2015 adoption of microchip cards (EMV) in the United States as reason being. Forter analysts say that more criminals have since turned to online to commit acts of fraud.
 
In terms of the apparel segment, CEO of Forter, Michael Reitblat says: "This may be related to the new fraudsters who've joined the online criminal community following EMV adoption in the US and are perhaps sticking to a vertical they understand. It may also reflect the increased comfort of genuine shoppers with the idea of buying fashion items online and returning as necessary."

Despite the hit to the apparel segment, fraud attacks in the luxury market declined by 8.4 percent, as well as by 1.8 percent in the electronics segment. In the digital goods segment, fraud fell 22.6 percent and in the travel and hospitality industry by 33 percent. Food and Beverages however, saw an increase in fraud attacks of 49.8 percent.
 
Meanwhile, the international fraud attack rate decreased by 13 percent as compared to 2015. Forter’s researchers attributed this decrease to a growth in genuine international orders rather than a decrease in fraud. Still surprising though, as international orders are well known to carry higher risk.