Online Fraud Up 233%
The rate of online fraud attacks increased by 233% between 2019 and 2021, according to RiskOps platform, Feedzai.
The figure was included in the company’s newly released quarterly financial crime report, The RiskOps Age, which is based on analysis of over 18 billion global banking transactions throughout 2021.
By identifying trends in consumer spending and fraud attacks and comparing transactional intelligence from 2021 with data gathered during the previous three years, the report sheds light on how financial crime evolved during the global COVID-19 pandemic.
A key finding in the report was that while online transactions grew 65%, online fraud attack rates grew by 233%. Alarmingly, fraud targeting digital entertainment increased by 794% from 2019 to 2021.
Among the attacks reported at major organizations, Feedzai’s research found 30% of attempted online transactions were fraudulent.
Florida, which saw a 202% rise in in-store credit card fraud, was found to be the riskiest state in America for card-present fraud. The data indicates that the fraud was primarily committed in person in 24-hour convenience stores by criminals using stolen debit card PIN codes.
Washington DC, New York and Maryland were the second, third and fourth riskiest states respectively. The safest states for fraud were Nebraska and Iowa.
Analyzing which attack vectors were most used in 2021, researchers found account takeover (ATO) to be the most common fraud, followed by social engineering attacks, purchase scams, impersonation scams and smishing attacks.
Miami, where the fraud rate increased 511% in 2021, was found to be the worst US tourist city for fraud, followed by Los Angeles and San Francisco.
“Living the digital lifestyle adds a world of convenience, but also provides a low-risk, high-reward environment for fraudsters,” said Jaime Ferreira, vice president of Global Data Science at Feedzai.
“It’s the perfect place for fraudsters to hide – in a massive number of low-dollar amount transactions. The more transactions, the more opportunities for them to test stolen cards or other scams.”
Ferreira urged both consumers and banks to watch out for small fraud transactions which can accumulate swiftly and add up to “big bills.”
