Midway through December, data indicates holiday fraud is rising sharply as expected.
The latest data from Digital Transactions indicates that over the five-day holiday shopping period there was a 29% increase in suspected fraud when compared with the same time period in 2018. This uptick in fraud comes with increased holiday spending, particularly online.
Black Friday brought in $7.4 billion in just e-commerce sales, with Cyber Monday clocking in a record $9.4 billion. That was a 20% increase in spending from 2018, according to Adobe Analytics. For suspicious transactions Black Friday appeared to be the most impactful day of all, accounting for both the most fraud and legitimate sales (26% of the four-day total).
It's clear fraudsters are following shopper's habits. As more and more shoppers spend online, so does the amount of fraudulent attempts across CNP channels.
• Mobile-phone and tablet users accounted to 63% this year; this was 58% in 2018; (Up 7% in total since 2017).
• 63% of suspected transactions for the weekend came from mobile devices, up from 57% in 208. (Up 12% in total since 2017).
“Year after year, it becomes clear that when not at work, consumers increasingly prefer using their mobile devices to make retail purchases due to their convenience,” said Melissa Gaddis, senior director of customer success at iovation, a unit of the credit-reporting company TransUnion LLC, in a statement. “Once at work, when they’re at their desk, consumers turn to their desktop and laptop computers to make purchases.”
What Banks and Credit Unions Can Do About Rising Holiday Card Fraud
The uptick in holiday shopping card fraud leaves financial institutions in a tough position: Manage the fallout from higher declines or take on additional fraud risk to minimize cardholder disruption. Getting proactive about holiday card fraud can alleviate that burden.
Bank and credit union leaders must educate cardholders on making safe purchases and monitoring their cards frequently. But you can't stop there. For financial institutions, it’s important to implement real-time monitoring for fraudulent or unusual patterns, increase customer interactions, and minimize re-issuance disturbance.
Issuers must educate cardholders on making safe purchases and monitoring their cards frequently. For FIs, it’s important to implement real-time monitoring for fraudulent or unusual patterns, increase customer interactions, and minimize re-issuance disturbance.
After the holiday season, issuers should follow-up with fraud transactions and compromised card analysis in order to perform a more targeted, efficient re-issuance process. Following the holiday season, FIs should determine where gaps exist by investing in better and faster technology tools. They should also determine where gaps exist by investing in better and faster technology tools.