Published: September 29, 2020
Reading time: 2 minute read
Written by: Kayla Parker

2020 has been marked by unprecedented global changes. The outbreak of the Coronavirus (COVID-19) has forever altered how individuals and businesses approach their day-to-day activities. For those in the commerce space, e-commerce activity has seen consumer volumes fluctuate considerably. Surges in new online users have impacted how merchants approach their business practices and affected how and where fraud and abuse occur. 

This edition of the report highlights four major trends seen over H1 2019 – H1 2020: 

1. A Boom of New Online Users Creates Risk for Increased False Declines and Fraud Chargebacks

Since March 2020, the closing of many brick-and-mortar locations combined with stay-at-home orders has accelerated e-commerce growth. 

  • New users now account for nearly 30% of all online transactions

While new users create business opportunities, merchant systems are also likely to be overburdened with new accounts and they risk their manual review teams or legacy fraud prevention systems falsely declining these accounts – due to lack of information – resulting in lost revenue and negative impacts to their brand reputation.

2. Online Shopping Replaces Brick and Mortar, Masking the Impacts of Fraud

In industries where transaction volumes significantly spiked, the proportion of fraud attacks appears to have decreased. Sheer numbers of fraud are not necessarily decreasing, but the percentage is. These growing consumer transaction volumes have masked fraud and abuse attacks and vulnerabilities. Fraud and abuse remain persistent issues that merchants must prioritize. 

3. New Channels Are Creating New Opportunities for Fraud and Abuse

To ensure that they are able to better accommodate their customers’ needs amid a complicated environment, many merchants are expanding their omnichannel offerings. These include Buy Online Pickup In Store (BOPIS) options, more flexible returns policies, as well as free delivery options. While these improve overall customer satisfaction, they also create new vulnerabilities for both legitimate customers to abuse and fraudsters to exploit. 

  • Buy Online Pickup In Store (BOPIS) fraud attacks have increased by 55%

4. Fraudsters Are Laying the Groundwork for Future Attacks

COVID-19 has served as a catalyst for nearly all merchants to optimize their digital channels and has pushed focus from security, to instead, business solvency. As such, with diminished security precautions in place, and focus diverted elsewhere, fraudsters have used this time to breach accounts and harvest data. Online criminals are accruing this data and aging accounts now to launch account takeover attacks and other account-based attacks and abuse in the coming months. 

Looking Ahead

Global commerce conditions are changing dynamically, and merchants require a fraud prevention system that is nimble enough to scale alongside their business requirements, even as these may change. With the holiday season quickly approaching, and projections of online consumer activity soaring in the coming weeks and months, merchants should prepare now to prevent an impending wave of fraud attacks and abuse.

Forter’s Ninth Edition Fraud Attack Index aims to arm merchants and their businesses with the information they need to prepare for the months ahead, and to accurately stop fraud and abuse even as COVID conditions shift. For a deep dive into this comprehensive data, download the full report now.

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2 minute read