While eCommerce and mobile payment volumes hit record levels on Black Friday and Cyber Monday, the fraudsters were seizing the opportunity to attack. This included increased fraud attempts from mobile devices and higher average order values for fraudulent purchase attempts.
Fraudsters know that online retailers are especially busy this time of year and increase their attacks accordingly. As online traffic and transaction volumes reach their peaks fraudsters are often able to sneak more fraudulent orders in under the radar and cause more damage with attacks causing website downtime. According to a 2013 survey from the Ponemon Institute and RSA, nearly two-thirds of organizations report seeing a significant increase in attack activity during the holidays while less than one-fourth believe such attacks can be quickly detected and remediated. This has serious implications for online retailers as the study estimates that just one hour of site downtime on Cyber Monday could cost as much as $3.4 million when accounting for lost sales along with brand and reputation damage.
As the mobile channel continues to grow we can also expect increases in fraud from mobile devices. Various reports cited surging online transaction volumes from smartphones and tablets this Black Friday and Cyber Monday. But according the fraud prevention firm Signifyd there were also increases in the number of and dollar value of fraud attempts from mobile devices. Signifyd found that 1.2 percent of transactions made from a smartphone were fraudulent on Black Friday while average dollar value per transaction was considerably higher for both legitimate and fraudulent transactions originating from mobile devices. Fraudsters know that the average consumer is spending more on this day so they will try to as well. The average fraudulent transaction amount on a typical day is about $130 for online transactions from smartphones and about $115 for tablets. On Black Friday the average per transaction amount for fraudulent transactions was over $190 for smartphones and $210 for tablets.
Fraud estimates for purchases made between Black Friday and Cyber Monday, coming from fraud prevention vendor iovation, were significantly lower at only 0.5 percent of online retail purchases. Fraudulent purchases over this time frame decreased by two-thirds from 2012 when fraudulent transactions made up 1.5 percent of online retail purchases according to iovation.
Not only do online merchants need to be prepared for fraud activity during the peak online shopping days, but so do consumers shopping online. On Cyber Monday various law enforcement agencies around the world seized 690 domain names owned by websites selling counterfeit goods. Consumers are also more likely to see phishing attacks, malicious pop-up ads and other scams as fraudsters know consumers are spending more time looking for great deals on Black Friday and Cyber Monday.
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