Fraudsters use ever-morphing cyber fraud methods over the holidays. NuData’s intelligence supports industry trends that e-commerce is increasingly mobile and high-risk.
You’ve heard us say over and over how the hackers have to keep evolving tactics to stay in front… Well, the holidays are no exception. Some will work all year waiting for an opportunity like the holiday rush. Fraudsters get pretty clever over the holidays. As any company should do, NuData reviewed data (current and historical) for some insight into cyber risk for this holiday season. What we found supports industry trends that e-commerce is increasingly mobile and high-risk.
- Fraudsters are using increasingly sophisticated cyber fraud techniques and leveraging these spikes in activity over holiday shopping periods to circumvent detection.
We analyze over 80 billion behavioral events annually over our customer base, and in October alone, performed real-time analysis on 40 billion data points. We found that:
- High-risk events have more than doubled since this period last year representing a higher percentage of total traffic over all placements.
- At the login, high-risk activity increased from 4% to 15%.
A whopping, 60% of new account creations are fraudulent compared to only 39% last year. With the underground awash in compromised consumer data from breach-after-breach, fraudulent account creation will continue to climb. Fraudsters create fraudulent accounts, and at times, will let them sit dormant or make the accounts look legitimate during the time leading up to peak opportunities such as holiday seasons, and then strike. Typically, cybercriminals target these times of year because they know security teams are stretched and policies are loosened up to accommodate volume and they can hide attacks within the volume.
- We found that account takeover continues to be a dire problem for retailers. A staggering 600% increase in login anomalies over this time last year was recorded. Also, both volume and sophistication of these attacks spiked due to stolen personal data being so easy to obtain on the Dark Web, and the fact that consumers continue to use the same usernames and passwords from site to site. Login processes have never been so easy to subvert.
This month alone, we’ve already seen a 128% increase in sophisticated scripted attacks from hackers gearing up for this holiday weekend.
We recorded 50 million fraudulent attempts last November across the network consortium and are predicting an increase in high-risk attacks targeting key retailers. We anticipate that there will be approximately 82 million of these attacks over the same holiday period across our Trust Consortium.
Mobile represents a real concern for merchants this holiday season, as consumers continue to move to mobile shopping, retailers are trying to balance security and experience. We observed a 258% increase in unique devices (across our customer base), firmly supporting industry statistics of over50% of all ecommerce traffic now coming from mobile devices.
- Last holiday season mobile devices represented only 11% of total purchases; this year mobile device use is trending toward 25% of all purchases.
- As predicted, with increased usage, there will come increased threats. Our data shows a spike in fraudulent activity from the mobile. We found that 11% of mobile transactions were high risk in 2015, and this has increased to 32% this year, equating to a 191% increase over 2015. Fraud increases of this kind could have significant dollar value. The typical value of a fraudulent transaction on Black Friday is $190 on a smartphone and $210 for tablets
Fraudsters are using increasingly sophisticated techniques to steal data to circumvent detection:
- The rate of device and location spoofing behavior has also grown. Organizations relying heavily on device ID and geolocation-based solutions to find risk may be in trouble, as geographical and IP spoofing represented 10% of all risky login activity last fall leading up to Black Friday.
- In general, NuData found that account takeover and new account creation attacks are more challenging to detect by traditional fraud teams and many fraudsters are gravitating toward to these tactics for this reason.
Robert Capps, VP of Business Development at NuData Security says:
“Analyzing the information discovered from the NuData Trust Consortium, it is clear that attackers are rapidly evolving their methods to more complex and evolved schemes. Organizations must be ever vigilant as fraudsters leverage the mass of freely available data on the dark web for cybercrime. Expecting consumers to maintain strong, non-reused passwords isn’t realistic, meaning retailers need to shoulder an even larger responsibility to protect their brand and users. Which is why it is more important than ever for online merchants to employ technology that can help them effectively differentiate good customers from bad.”
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