A lot has happened in the past year, and that is why we have gathered 5 interesting statistics to highlight changes in the chargeback and fraud industry.
The overall number of fraud cases dropped between 2019 and 2020, although those frauds' value increased by 13%, totalling $16.9 billion globally. In 2019, fraud amounted to £1.9 billion in the UK. The combined value of fraud is increasing year-on-year, and with fewer than 20% of severe and friendly fraud cases reported, the real costs are significantly higher.
Fraud in the UK has hit epidemic levels, according to a 2017 study. Identity fraud accounted for 56% of all reported fraud, with 89,000 cases recorded during six months. Epidemic levels of fraud are believed to be occurring because online transactions and deliveries are easier to exploit and pose significantly less risk than traditional theft.
Fraud detection systems monitor trends to understand risks. The latest statistics have flagged millennials as particularly vulnerable, with one in three reports made by this generation. To protect themselves from identity fraud, millennials should use 2-factor authentication when completing online transactions. The secondary authentication might, for example, be a text message or push notification in an app before payment processing.
The 2019 Consumer Sentinel Network Data Book highlights 271,823 credit card fraud reports from 2019. This puts credit card fraud at the top of the list for types of identity fraud. Credit card fraud is now the leading reason for chargeback requests. Other identity theft sources numbered 215,000 cases, with almost 105,000 cases assigned as lease or loan fraud.
New account fraud has been flagged as a significant source that is increasing, along with millennials.
Identity theft statistics reveal the problem is not going away.
As you can see, even before the Covid-19 pandemic and mass adoption of online retail, fraud is increasing, and retailers and authorities need to do more to prevent fraud (by keeping customer details safe and keeping a better paper trail so that fraudsters can be caught.)
The best way to keep customer data safe is with a penetration test. Chargeback management software from PaymentHelp can help you reduce fraud and friendly fraud. Manage your chargebacks for free by registering today or learn more about becoming a partner.