2016 e-commerce rates to surpass 2015 totals.
The transition to EMV is designed to inhibit credit card fraud, and it seems that it might be working for in-store purchases, but a new report from Experian finds that card-not-present fraud is still on the rise. In fact, 2016 e-commerce fraud attacks are currently anticipated to surpass the 2015 totals. The 2016 e-commerce fraud attack rates are at least 15 percent higher than last year’s total, suggesting that card-not-present fraud is actually increasing. Of course, e-commerce sales are also on the rise by nearly 16 percent year-over-year according to the U.S. Department of Commerce, but the Federal Trade Commission also reported that credit card fraud complaints also saw the highest reported numbers in the past decade, seeing a 41 percent increase from 2014 to 2015.
"Fraudsters continue to exploit new vulnerabilities, and perpetrate card-not-present fraud against businesses using stolen consumer identity and payment data," said Adam Fingersh, Experian general manager and senior vice president of Fraud and Identity Solutions. "This reinforces the need for aggressive fraud prevention strategies and adoption of open technology platforms to prepare for the latest emerging cyber security threats. Fraudsters have what they need to quickly capitalize on compromised data, so businesses need to be prepared."
For the study, researchers analyzed millions of e-commerce transactions completed during the first half of 2016 in order to identify the latest fraud attack rates for both shipping and billing addresses nationwide.
Other recently released data from Forter told a similar story, suggesting that e-commerce fraud increased about 27 percent from the fourth quarter of last year to the first quarter of this year, timing which coincides with EMV chip cards and terminals coming into broader usage in brick-and-mortar stores.
And last year, Innovative Retail Technologies reported that some 8 million consumers were predicted to experience card breach and identity fraud in the same year by 2018, including card-not-present fraud. According to Javelin Strategy & Research, point-of-sale card fraud will decrease while card-not-present and new account fraud is on the rise. Among the predictions were an increase in CNP fraud losses from $10 billion in 2014 to $19 billion in 2018; a decrease in POS fraud by just $1 billion, or 17 percent, from $6 billion in 2014 to $5 billion by 2018; and a 60 percent jump in account-takeover and new-account fraud from $5 billion last year to $8 billion in 2018.
And even as the EMV transition was begun last October, the FBI warned that EMV cards alone did not provide enough security to protect against card-not-present fraud, and issued a warning that “While EMV cards offer enhanced security, the FBI is warning law enforcement, merchants, and the general public that no one technology eliminates fraud and cybercriminals will continue to look for opportunities to steal payment information.”
