The good news? Fraudsters have at long last lost some ground. The bad news? They’re far from down for the count.
The May 2017 edition of the Global Fraud Index™, a PYMNTS and Signifyd collaboration, reveals that although merchants have landed some jabs in the fight against fraud, bad actors still seemingly have relentless stamina.
Since Q1 2016, fraud overall has gone down by a solid 34.7 percent. But it isn’t cause to celebrate – yet. Despite the decline, merchants across eight major industry segments are expected to lose $48.2 billion this year. And a lot of that can be attributed to spikes in fraud, despite the overall decline, in industries like online retailing where fraud rates have spiked 146.5 percent between Q1 2016 and Q1 2017.
Fraudsters also like high-value industries. Merchants in the Jewelry and Precious Metals sector have seen fraud spike by 12.8 percent, making it a favorite industry for fraudsters.
Other key takeaways from the May 2017 Global Fraud IndexTM include:
High-value orders have the highest fraud rates – online orders worth more than $500 have an almost 20-times-higher fraud rate than lower-value transactions.
In Q1 2017, California accounted for 18.9 percent of total fraud in the U.S. – followed by New York, which accounted for 15 percent and Florida, which accounted for 9.9 percent of total fraud.
Jewelry and Precious Metals merchants saw an average charge back of $1,970, the highest among the eight analyzed merchant categories. The Consumer Electronics industry still has the second-highest average chargeback – $1,456 – for orders over $500.
About the Index
The Global Fraud Index™, a PYMNTS and Signifyd collaboration, analyzes fraud attempts on eCommerce merchant websites, reflected as a percent of eCommerce sales transactions and tracks what’s trending. Have the attempts gone up? Down? Stable? That’s pretty critical because the key to preventing fraud is understanding where fraud is originating, what tools the fraudsters are using and which industries and areas they are targeting.
The Fraud Index reports this in several ways. Each index includes a metric that quantifies the rate of fraud attempts on eCommerce merchants and how that changes over time. The index examines different aspects of fraud, such as which countries or regions are most seriously threatened by fraud and which industries should take a closer look at what’s happening around them. It also explores what can be done to stop or slow down fraud trends and how those methods are (or are not) working.