How to recognize an online fraudster?

08/04/2016

According to a recent report called “The United States of Fraud,” certain factors were identified that could indicate the likelihood of fraud, including: age, billing address, shipping address and purchase value of an item.

With the shift to EMV credit cards, credit cards are now much more difficult to clone. Nevertheless, online fraudster such as credit card fraud is still a big threat online.

“EMV technology makes it so much more difficult to duplicate a physical credit card” says Jason Tan, CEO and co-founder of Sift Science. “They’re still looking to make their money, and doing their business online is a lucrative channel because it’s scalable and anonymous.”

“Sift analyzed over 1.3 million transactions with shipping or billing addresses in the U.S> from August 2014 to August 2015, transactions that were drawn from their customers’ servers (they work with AirBnB, OpenTable and Pebble, to name a few). Sift Science then cross-referenced with third-party data from FullContact to identify gender and age.” Jen A. Miller

The study identified men to be more likely than women to commit fraud, in addition, they pinpointed a popular time in which fraud is committed: 3 a.m. The study also found that fraud was more likely to be committed in small amounts; purchases of $20 or less are 2.16 times likely to be more fraudulent, according to sources.

Other discoveries: Fraudsters impersonate older people as a play on sympathy. “We think it might be that, for a lot of online businesses, they will be more forgiving if you look like an older person because they’re unlikely to be fraudsters,” Tan says. “Maybe fraudsters have figured that out and are trying to sneak themselves in by using that forgiveness.”

“The U.S. is the last big market to make the switch over to EMV,” says Gilles Ubaghs, senior analyst of financial services technology at Ovum. “What we’ve seen in every single other market is other forms of fraud increased.”

According to the Federal Reserve, car-present fraud reached $2.4 billion in 2014. Ovum predicts that if the U.S. achieves a theoretical 100 percent implementation of EMV, that card- present fraud would drop to $1.75 billion a year by 2020. However, because of this shift, Ovum estimates that in the U.S., car-bot-present fraud could reach $2.6 billion by 2020.

Ubaghs adds there’s also the possibility for more “traditional” forms of fraud, like muggings and pick-pocketing. ATM’s can even be remotely monitored, either through tiny hidden camera or through insidious software programs.

Although new EMV technology makes credit cards harder to duplicate, users should be ever vigilant about which sites they visit and what financial forms they submit online. Users may never know who is watching.