The Coronavirus pandemic has led to significant changes in consumer buying behavior and raised concerns about e-commerce fraud.
Fortunately, the total e-commerce scam does not appear to have increased proportionately with the number of purchases online.
"We have not seen any significant change in the amount of cards that are not present at this place," said Eyal Raab, vice president of sales and business development for Riskified, an e-commerce fraud prevention company.
“There have been some fluctuations in different industries, but it is not uncommon. What we have seen is a change in shopping behavior, Raab continued.
"What we've seen is a change in shopping behavior …"
"For example, we have seen a significant increase in consumers using mobile apps to make purchases with a reduction in the proportion of orders made via desktop or mobile web. It fits. People stay at home instead of going to an office, so they spend more time on their mobile devices.
“We also see people change what they buy, with large increases in food purchases, fitness equipment and home improvement products. All this makes sense. "
Although, as Raab said, there have been no significant changes in the percentage of transactions affected by fraud, merchants need to be aware of changes in how fraud works.
"E-commerce is changing rapidly during this global pandemic, with some industries experiencing major changes in transaction volumes or more requests for faster shipping," said Rich Stuppy, head of customer experience at Kount, a fraud company.
“Especially in these circumstances, fraud prevention is not just about stopping claims, but it also plays a role in approving and speeding orders and stopping abuses of policies that lead to resale and retail arbitrage issues. It will be crucial to monitor the trend of fraud in the coming weeks, as recoveries will start rolling in from this period. "
Stuppy's comments are in line with the latest data from TransUnion, a consumer credit bureau. About 22 percent of the 1,068 US TransUnion adults surveyed claimed they "had been targeted by digital fraud related to Covid-19."
"It is obvious that social distance has changed consumers' shopping behavior globally and will continue to do so for the foreseeable future," said Greg Pierson, senior vice president of business planning and development at TransUnion. "Fraud will undoubtedly continue to follow the trends of good consumers and adapt their systems accordingly."
Effectively, this means that crooks and cheats who had hacked, phished, socialized or used romance and bank fraud to steal a consumer's identity have changed their tactics to include Covid-19 related messages and mimic home buying behavior.
Raab reiterated, "We have not seen any significant change in the amount of fraud, but we have seen changes in the total volume for some industries.
"Industries where legitimate purchases have declined – but fraud has remained fairly constant – may seem particularly risky right now, but that's generally due to the decline in legitimate customers and not an influx of fraud."
On the one hand, e-commerce retailers must be aware of fraud trends. While there may not be many curious thieves who are re-attacking the industry, the methods used by established cheaters will change.
In practice, this may mean that e-commerce retailers must be careful when accepting and fulfilling "questionable orders." But the same retailer must also be aware of the potential for relatively more "false positives" thanks to changes in how legitimate, reliable customers shop.
“If merchants are accustomed to a pattern and see a rapid increase in something unknown – store food or buy treadmills through a mobile app, for example – they need to make sure their system adjusts to approve these orders rather than seeing them as suspicious. and possibly rejecting them, "Riskifieds Raab said.
Raab's companies and competitors, which include Ekata, Kount and TransUnion, have all done much to help e-commerce to approve more transactions. The goal of detecting and preventing fraud is to filter out the villains while accepting good customers who can show off new behavior or shop in a new way.
Raab added some advice for retailers who are particularly concerned about fraud during the pandemic.
"Try not to overreact to fear of fraud. Things can change, of course, but the pandemic did not suddenly create legions of new impostors. So there is no reason why e-commerce expects increased risk, ”Raab said.
Instead, think about the current climate and make sure you and your systems can adapt quickly. Recognize that shopping has changed the world over, and patterns that triggered alarm bells in the past can be people who adapt to the new norm.
"If merchants can adapt to these changes, they will be able to accept as many legitimate orders as possible and consumers will receive their goods."