eCommerce Fraud Attempts Growing at Alarming Rate

eCommerce merchants clearly need to ramp up their security efforts based on new data found in a global study. The new Global Fraud Attack Index report shows that in 2015, attacks by fraudsters were up a whopping 163 percent, representing a 2.5 times increase during a three-quarter period.

The data, part of collaborative research between PYMNTS.com and identity fraud prevention company Forter, tracks the rate of fraud attempts on U.S. merchant websites. The research breaks down fraud attempts by type along with the geography of merchants under attack to offer a baseline for assessing global fraud trends in the payment and ecommerce sector.

According to the report, fraud attempts were most prevalent in the digital and luxury goods segments along merchants selling food and beverages, clothing and electronics. Botnet attacks on digital goods comprised the most popular type of fraud attempts, representing 75 percent of overall potential fraud losses.

"As payment technologies have become more and more sophisticated over time, so too have the fraudsters who attempt to take advantage of those technologies," said Karen Webster, CEO of PYMNTS.com. "We hope that the Index helps merchants understand how the threats are changing as these fraudsters try to keep one step ahead of the technologies designed to put them out of business."

The luxury goods segment is rapidly becoming a major fraud target, and the research found that the sector experienced a four-percent rise in attack attempts during the period observed. It was one of the few types of eCommerce segments to experience a rise in attacks. Location manipulation is another growing threat, according to the report. Researchers found that while it comprises less than 20 percent of all fraud attacks originating outside of the U.S. and Europe, it makes up more than a third of the overall potential cost of fraud attacks.

"At the same time the attacks on merchants have increased, we've seen fraud attempts as a percentage of revenue for online merchants grow 94 percent from 2014 to 2015," said Michael Reitblat, CEO of Forter. "It's obviously never been more important for retailers to understand fraudsters and to protect their businesses from these growing threats."