Online Payments Fraudsters Prosper as Unemployment Rises According to ReD
NEW YORK, October 11, 2010 /PRNewswire/ -- Card crime is soaring to unprecedented levels in the US, warns Retail Decisions (ReD), a world leader in payment fraud prevention.
Revealing a massive 32% rise in the amount of fraudulent attempts to buy goods on the internet, by mail order or by telephone in the first half of this year, ReD predicts that the continuing rise in unemployment and the increasing ingenuity of fraudsters is partly responsible.
With the unemployment rate approaching 10%, there are almost 15 million people in the US now out of work. Sadly, the financial fall-out is that when the chips are down, crime tends to flourish.
Thieves with stolen or cloned cards prefer to use them invisibly, where they don't have to be physically handed over. So these eCommerce channels are constantly under threat from scammers, and the number of attacks is skyrocketing in the US.
Carl Clump, CEO of ReD, says: "In the first six months of 2010, our figures show that attempted ecommerce payment fraud reached an estimated value of $1.14 billion. We predict this could reach $2.83 billion by the end of the year - increasing by 32% compared to the $2.14 billion total recorded in 2009."
This huge climb is a significant contrast to the improving situation in the UK, where the market is predicted to see a 12% fall in the value of attempted card not present fraud this year.[1] This has been largely due to combined forces of industry initiatives such as chip and PIN and the increasing use of sophisticated fraud detection tools by retailers and banks.
Carl Clump further comments: "This is a stark warning for US merchants and consumers to protect themselves against payment fraud. Merchants must ensure they have a dynamic fraud prevention solution in place that can adapt quickly to changes in the way fraudsters operate."
Only a real-time, pro-active, customised fraud prevention such as ReD's, can prevent online assaults from becoming effective. Most fraud prevention systems fall down because their fraud-screening is done in batches - after the transaction has occurred. With ecommerce fraud, instantaneous screening is the only way to consistently spot it, reject it and thwart the criminal - and so avoid potentially catastrophic losses for the innocent victims.
Although the onus is on retailers to ensure effective barriers are put in place to protect their customers against the increase in attempted fraud, ReD urges consumers to be vigilant and closely guard their personal details. The large increase in attempted payment fraud shows that cyber-conmen continue to be very active, and that their techniques are working.
Carl Clump further comments: "Criminals are creative, and their devices can be invisible and technical, or visible and convincing. So it's crucial that consumers are cautious and aware. Fraudsters often try tactics such as phishing - sending e-mails which appear to be from a genuine company and ask for a customer's account details, or e-mails containing a Trojan link, which once clicked on means the fraudster can monitor keyboard strokes and discover important, personal information such as passwords. It's vital that consumers are aware of these tricks, so that their details are kept safe and away from the wrong hands."
ReD's figures indicate that not only are criminals becoming more aggressive, attempting fraud attacks more frequently, it also appears that they are aiming higher and targeting increasingly expensive items. In the first six months of 2010 the average transaction value for attempted fraud went up by an estimated 34% compared to the same period last year, from $111 to an estimated $149.
About ReD
Retail Decisions (ReD) is a world leader in card fraud prevention and payment processing. A specialist supplier to the payments industry worldwide, ReD has over 20 years experience in the fraud prevention market. Its blue-chip international clients come from the global telecommunications, retail, travel, petroleum, banking and the broader e-commerce sectors.
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[1] UK Cards Association, October 2010
SOURCE Retail Decisions (ReD)
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