Fraudsters and Trust and Safety teams have found themselves in a never-ending game of cat-and-mouse, evolving their methodologies and processes to outsmart and outwit each other. Fraudsters know they can’t keep relying on the same tactics, so they change things up to try to throw fraud professionals off their scent. Fraud fighters then have to remain on top of the latest schemes and preventative technology to remain one step ahead.
But with so much information to comb through, how can Trust and Safety professionals know what’s most important to focus on? Where can they turn to for reliable, relevant, and regular updates on industry trends? Enter the Digital Trust & Safety Index.
Our inaugural report aims to keep those on the front lines of fighting fraud up-to-date on industry developments, so they can make informed decisions that will keep their customers and businesses safe from scams, and help them stay one step ahead of bad actors. What were some of the biggest takeaways from our recent findings?
Payment Fraud: On the Rise and Going Mobile
Though cybercriminals continue to innovate and find new ways to defraud businesses and consumers, payment fraud remains a tried-and-true scheme – and they’re embracing it more than ever. Year over year, payment fraud increased 73% in 2019, well exceeding the growth of digital payments overall. But in light of one year after another of devastating data breaches and compromised payment information, there may be a connection between stolen payment information being used to commit fraud online and the increase in payment fraud.
Contrary to the quintessential image of the cybercriminal working from a desktop computer in a dark room, fraudsters have instead gone mobile: over half (51%) of the attempted payment fraud in 2019 was done via mobile devices. This should serve as a wake-up call to Trust and Safety and fraud teams, 52% of whom report tracking fraud on mobile channels – it’s more important than ever to analyze mobile signals to defend against fraud and abuse. For even more perspective, we looked into the operating systems fraudsters turned to the most for committing payment fraud and found that while Windows (37.73%) remains the most popular, iOS and Android aren’t far behind, at 27.75% and 22.9%, respectively.
New Payment Methods, New Ways to Steal
A running theme in our report was subversion of expectations, from fraudsters’ preferred devices and operating systems to their new favorite payment type with which to commit fraud. In 2019, the payment types most associated with fraud were:
Credit Cards – arguably the payment type most commonly associated with fraud – are nowhere near the top of this list. Rather, Online Promos, Digital Wallets, and Cryptocurrency (newer, digital-only payment innovations) are three of the top five, another indicator that fraudsters are diversifying their tactics. Credit card transactions are now less likely to be fraudulent than digital-first payment mechanisms, including “pay with cash” options that are particularly common in certain on-demand apps.
Emboldened to experiment with emerging payment types, fraudsters aren’t sticking to “flying under the radar” by stealing small amounts from businesses but are instead seeking higher-value purchases. We found that the average fraudulent purchase amount was three times the amount of a legitimate transaction.
Our Understanding of Fraud is Changing – and Trust and Safety Pros Need to Take Notice
Our findings revealed a troubling trend: cybercriminals are exploiting newly emerging technologies and changing their behaviors to throw fraud professionals off their scent. But staying on top of these developments and remaining proactive – not reactive – is key for Trust and Safety professionals to remain one step ahead in the fight against fraud.
The trends discussed here are merely the tip of the iceberg of the wealth of information revealed in our latest report. Download Digital Trust & Safety Index: A Rapidly-Changing Fraud Landscape to learn which verticals fraudsters are targeting the most, in which season fraudsters really start their holiday scams, and many more insights critical to developing an effective fraud-fighting strategy.
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Source: Sift Science