E-commerce fraud increased 33 percent in 2016
April 14, 2017
• An LA suburb is the capital of e-commerce crime
• “One of the major drivers for the increase in fraud attacks is the continued adoption of terminals for chip-and-pin credit cards”
Finding frustration from the new chip-encoded credit cards, thieves are migrating to more online targets, with e-commerce fraud up 33 percent in 2016 compared to 2015, according to a new report Friday from credit reporting company Experian of Costa Mesa, a unit of Experian plc (LONDON: EXPN).
Experian analyzed millions of e-commerce transactions and ranked the top states, cities and ZIP codes for shipping and billing fraud across the United States, a spokesman for Experian explains. The data represents the attempted fraudulent e-commerce transactions against the population of overall e-commerce orders ranked by the fraud attack rate.
Delaware, Oregon, and Florida were the top-ranked states for billing and shipping e-commerce fraud in 2016. Both Oregon and Delaware saw an increase in e-commerce billing fraud attacks of over 200 percent.
Three states, Florida, California and New York, accounted for more than 70 percent of total e-commerce billing fraud attacks.
"One of the major drivers for the increase in fraud attacks is the continued adoption of terminals for chip-and-pin credit cards. While these cards reduced counterfeit credit card fraud at the point-of-sale, they have driven fraudsters online. This pattern is similar to what other markets saw when transitioning to chip-and-pin cards," says Adam Fingersh, Experian general manager and senor vice president. "As more compromised data becomes available from breaches, it's easier for fraudsters to get their hands on identity data requiring consumers and businesses to stay diligent in protecting themselves."
According to Experian's rankings of e-commerce fraud attack rates for 2016 the data shows:
South El Monte, in the Los Angeles metropolitan area, was the top ranked city for both shipping and billing fraud in 2016, Experian says. The billing fraud attack rate was nearly double that of the second-ranked city, Port Reading, New Jersey.
Miami, Florida, was home to the most ranked ZIP codes for e-commerce fraud accounting for 17 of the top 100 for shipping fraud and 20 of the top 100 for billing fraud, it says.
Ten states saw an increase of over 100 percent in shipping fraudulent orders — Alaska, Colorado, New Mexico, Idaho, North Dakota, Maine, Montana, Iowa, South Dakota, and Wyoming, the report says.