While recent reports show fraud is declining, online department stores and high-value transactions have been hard hit by sophisticated cybercrime. Loss prevention firm Chargebacks911 alerts merchants to protect against fraud as a service (FaaS).
(Tampa Bay, FL) September 18, 2017 – PYMNTS.com reports that total fraud has declined 35% from the first quarter of 2016 to 2017; however, fraud targeting online department stores has risen nearly 150%, and among orders worth more than $500, 1 in 10 are fraudulent.(1) Chargebacks911, a leading dispute mitigation and loss prevention firm, advises eCommerce merchants to stay vigilant and take proactive measures as cybercriminals aim to cash in on fraud as a service (FaaS).
According to the latest PYMNTS.com Global Fraud Index, total fraud declined 34.7% from Q1 2016 to Q1 2017; account takeovers and stolen financials dropped sharply during that period, while “friendly fraud”—or chargeback fraud—rose slightly. At the same time, the eight industries studied suffered $48.2 billion in potential fraud losses, with fraud rising 146.5% among online department stores. And though fraud accounts for less than 4% of orders worth $500 or less, orders exceeding $500 had a 10.93% fraud rate.(1) Furthermore, experts suggest that FaaS will lead to greater proliferation of fraud, since shutting down one source simply leads another to emerge in its place.(2)
“Though it’s tempting to view declining fraud trends as a victory, eCommerce merchants must not become complacent as cybercriminals are continually working to remain one step ahead,” cautioned Monica Eaton-Cardone, co-founder and Chief Operating Officer (COO) of Chargebacks911. “Gone are the days when fraudsters had to have advanced hacking or programming skills; now, they can simply buy or rent tools, botnets and services on the dark web. So instead of lone attackers, we’re looking at a widespread network of organized crime.”
As one analysis noted, FaaS has evolved to a new level of diversification and specialization, with customer service guarantees and the promise of low risk and high returns.(2) When authorities manage to thwart one FaaS provider, the products and services are simply moved to a new site. One security professional compares it to “the mythical hydra—when the head is cut off, two grow to replace it.”(2) Faced with the perpetual threat of evolving FaaS developments, eCommerce merchants can’t afford to rely on yesterday’s fraud prevention tactics.
“There are so many different ways to commit fraud today—distributed denial of service attacks, ransomware, botnets, fraudulent chargebacks, affiliate fraud and more—that it has become extremely difficult for merchants to manage every security threat while dealing with the day-to-day running of their business,” said Eaton-Cardone. “For that reason, I would encourage online retailers to leave fraud protection to the experts and focus their own efforts on building sales, attracting new business and retaining customers.”
Eaton-Cardone recommends that eCommerce merchants maintain a dedicated information security team or provider to combat potential cyber attacks and data breaches, as well as a risk management and loss prevention specialist with expertise in chargeback management, dispute resolution, and risk and liability reduction. She counsels online retailers to seek partners that are Level-1 certified for Payment Card Industry Data Security Standard (PCI DSS) compliance and that offer extensive industry integrations, relevant reporting and real-time analysis. She also emphasizes the need for education and industry monitoring to stay abreast of emerging threats to security and profitability.
Chargebacks911 is committed to educating and supporting eCommerce merchants with solutions designed to maximize profits, reduce chargebacks and prevent fraud. To that end, Monica Eaton-Cardone and her team will be participating in a number of upcoming industry events, including the Fraud 360 World Tour in New York, the IMRG Data Summit and ChargeBash in London, and the IATA World Financial Symposium in Dublin. For details on Chargebacks911’s comprehensive risk management solutions, informative articles and other merchant resources, visit https://chargebacks911.com.
Founded in 2011, Chargebacks911 is the first global company fully dedicated to mitigating chargeback risk and eliminating chargeback fraud. As industry-leading innovators, Chargebacks911 is credited with developing the most effective strategies for helping merchants maximize revenue and fight fraud in a variety of industries, including e-commerce, retail, digital and travel. The company’s innovative solutions and exemplary customer service has earned a vast array of prestigious awards and honors, including the Customer’s Choice Best Chargeback Management award from the CNP Expo and the Best Industry Solution award from Airline Information.
Chargebacks911’s unparalleled category experience and ISD™ technology quickly identifies the true source of chargebacks, recovers lost revenue, mediates disputes, safeguards the merchants’ reputation, monitors transactions 24/7 and helps proactively prevent future fraud. A division of Global Risk Technologies, Chargebacks911 is headquartered in Tampa Bay, Florida, with offices throughout North America, Europe and Asia.