Attacks that look like humans are increasingly plaguing fraud professionals—a trend that is likely here to stay, according to new analysis from NuData Security.
The antifraud technology company’s recent 2020 H1: Fraud Risk at a Glance report looked at data and changes across its global online network during the first six months of this year. The analysis reveals that “human-looking or sophisticated attacks, those that focus on quality instead of volume, continue to increase.
Financial institutions are the target of the highest percentage of sophisticated attacks as 96 percent of login attacks on financial institutions were sophisticated—those that make an extra effort to emulate human behavior. That’s up from 90 percent in 2019.
Account creation attacks also increased as people stayed home during the pandemic, said NuData. High-risk account creation attempts among a number of merchants increased after the lockdowns began.
“Account creation attacks against a number of merchants, where bad actors create fake accounts for subsequent fraudulent use, have increased during the pandemic, compared to the same period in 2019,” said NuData in the report.
The growth in this type of attack is influenced by bad actors using new accounts to make fraudulent purchases with stolen card information or to buy sought-after and restricted goods at mass scale for later resale. In particular, from March to June, one in every two account creation attempts was flagged as high risk by the NuData platform.
“Fraudulent new accounts in the e-commerce space are also a step for illegitimate actions such as writing fake reviews, triggering video plays and likes, abusing sign-up offers, or hoarding items at checkout,” the report stated.
The report also noted that mobile high-risk traffic grew 55 percent percent during the period of January to June.
Chargeback Costs Up
NuData analysis also found chargeback dollar values more than doubled with 124 percent growth in the average dollar value of a chargeback.
In North America, once the lockdowns were in place, the average dollar value of a chargeback grew for in-store pickup (chargebacks issued for various reasons after the goods were picked up), compared to the average dollar value before the movement restrictions.
“Although the volume of chargebacks from purchases shipped to customers remained the highest, chargebacks from goods picked up at stores grew the most—more than 100 percent growth in April. As chargebacks are requested after purchases are finalized, May results could still be higher than reported in this analysis,” said NuData researchers.
E-Commerce and Digital Goods See a Comeback
On the positive side, e-commerce and digital goods traffic started to increase.
As the first lockdowns came into effect at the beginning of March and people made more purchases from home, e-commerce and digital goods companies had an average traffic increase of 67 percent compared to 2019, the report stated.