“More transactions means more fraud” is axiomatic in e-commerce and for the professionals tasked with protecting merchants from bad actors. A new study of global consumers confirmed that the pandemic not only resulted in more e-commerce transactions, it also introduced brand new users to the medium and fraudsters took advantage at a frantic pace.
The State of Consumer Attitudes on Ecommerce, Fraud & CX 2021 report found there were so many new e-commerce users during the pandemic (13 percent of those polled had never bought anything on an e-commerce site before March 2020) that older attack methods were finding green field again.
Phishing, according to the report, is having a renaissance, leading to consumers revealing username/password combos that fraudsters use as fuel for account takeover (ATO). Triangulation fraud is also enjoying a comeback globally, according to ClearSale.
New users are causing another problem for merchants: false positives. Consumers who are new to online shopping don’t necessarily behave like e-commerce veterans. That can result in technology searching for anomalous patterns to mistakenly flag legitimate customers as fraudsters. There are several things new customers might do that traditional fraud-fighting technology could mistake for a fraud attempt:
- They may start out with repeated, small purchases until they get used to e-commerce, which mimics how fraudsters will often “try out” a stolen card number with small purchases before going for a big-ticket item.
- New customers who just want to buy a specific item may use the search function to navigate straight for that item, put it in the cart and head to check out right away, which can look very suspicious if the customer has no previous order history.
- A customer with no purchase history whose first transaction is a big-ticket electronics item has a higher risk of being flagged.
- Novices are more likely to request urgent delivery, which fraudsters often do to reduce the odds of being caught before they receive their goods.
- A new customer who experiences a false decline will likely try to make the purchase again right away, and perhaps repeatedly. This purchase pattern can appear to be fraudulent.