U.S. and Canadian Retail Fraud Up 15% from Pre-Pandemic Period According to LexisNexis Risk Solutions True Cost of Fraud Study
The LexisNexis Fraud Multiplier™ projects that every
The pandemic changed consumer behaviors and fraudsters followed, taking advantage of merchants that accelerated mobile channel strategies. Respondents indicate there has been increased use of mobile apps and contactless payment methods at the expense of mobile browsers. This change in behavior comes with a fraud cost shift from browsers to these alternative methods.
Key Findings and Trends from the Report
Fraud Volumes Soar: The overall volume of fraud attacks has grown beyond pre and early pandemic periods, with businesses offering online/mobile transactions experiencing the largest year-over-year increase.
U.S.ecommerce merchants have been hit particularly hard with merchants reporting a 140% increase in attacks since 2020 and their counterparts in Canadareporting a 52% increase. Successful attacks rose 52% and 45% in those markets respectively.
- Struggles with Identity Verification: Identity verification remains a top challenge for merchants and represents a larger share of fraud losses compared to previous years. A recent LexisNexis Cybercrime Report revealed that synthetic identities and other account-related fraud frequently match to breached digital identity data such as email addresses and phone numbers. Merchants struggle to verify digital identity data and balance fraud detection with an exceptional customer experience. To that end, there is limited merchant use of solutions designed to support both issues.
Implementing Fraud Mitigation Tools:
U.S.retailers tend to use more fraud solutions than Canadian retailers. This includes passive/digital identity-based solutions that are effective at detecting sophisticated fraud while normalizing customer friction. The average U.S.retailer uses eight fraud prevention solutions while the average Canadian retailer only uses five. Use is more limited among ecommerce merchants in both countries, which weakens their fraud detection and prevention efforts.
- Quality Counts: Merchants that are serious about optimizing fraud detection while minimizing customer friction use multi-layered solutions across different customer touchpoints. This includes solutions that verify physical identity attributes, digital identity attributes and transaction risk. Merchants who invest in best-practice, multi layered solutions that are integrated with cybersecurity and digital experience operations experience a 71% lower volume of successful fraud attacks and a 12% lower cost of fraud.
"Retailers should anticipate and prepare for increased fraud in the foreseeable future, even as we see a light at the end of the global pandemic tunnel," said
"Organizations can no longer rely on manual processes and thin technologies to minimize fraud and reduce challenge rates, manual reviews and costs," White continued. "A solid solution includes implementing a robust fraud and security technology platform, which allows businesses to adapt to the changing digital environment while realizing strong fraud management and a risk-appropriate friction experience for genuine customers. Merchants should therefore take a multi-layered solution approach involving digital and transaction risk mitigation solutions that integrate with cybersecurity and digital customer experience operations."
2021 LexisNexis True Cost of Fraud™ Study
Ecommerce and Retail 2021 U.S. and Canada Edition
This is the 12th annual comprehensive research study on
Download a copy of the 2021 True Cost of Fraud™ Study for Ecommerce and Retail,
LexisNexis® Risk Solutions harnesses the power of data and advanced analytics to provide insights that help businesses and governmental entities reduce risk and improve decisions to benefit people around the globe. We provide data and technology solutions for a wide range of industries including insurance, financial services, healthcare and government. Headquartered in metro
View original content to download multimedia:https://www.prnewswire.com/news-releases/us-and-canadian-retail-fraud-up-15-from-pre-pandemic-period-according-to-lexisnexis-risk-solutions-true-cost-of-fraud-study-301359322.html