While last weekend’s holiday-shopping extravaganza unleashed a geyser of payment transactions, it also uncorked a flood of potential fraud, data released Thursday show.
Online shoppers spent $7.4 billion on Friday alone, with Cyber Monday sales, which by definition are e-commerce transactions, alone estimated to total a record $9.4 billion, up nearly 20% from 2018, according to Adobe Analytics.
But the e-commerce shopping binge also attracted plenty of active fraudsters. While the final number of actual fraudulent transactions isn’t available yet, the volume of online transactions that took place from Thanksgiving Day through Cyber Monday and were suspected of fraud rose fully 60% compared to the same number in 2017, according to iovation Inc., a Portland, Ore.-based company that specializes in device authentication. The increase in suspected fraud from last year’s five-day holiday-shopping weekend was 29%, iovation reported.
The worst day for fraud turned out to be Black Friday, which accounted for one-quarter of all suspicious transactions for the period. But that day also generated the highest level of legitimate sales, at 26% of the four-day total.
The trend toward mobile devices for online shopping gained momentum during the weekend, the data also show. While mobile-phone and tablet users accounted for 56% of transactions in 2017 and 58% in 2018, that number shot up to 63% this year. Fraudsters are following suit. Sixty-three percent of suspected transactions for the weekend came from mobile devices, up from 57% last year and 51% in 2017.
Criminals are simply aiming to emulate the general consumer population, iovation reported. “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.”
But much of the fishy online volume is coming from overseas. Fifty-seven percent of transactions from China over the period were suspected fraudulent, higher than from any other country except the Central African Republic. Lebanon came in second at 45%.
In the United States, Boardman, Ore., topped the list of cities generating suspicious online activity, at fully 70% of transactions, followed by two towns in Louisiana, Pineville (42%) and Alexandria (38%). But the transactions from Boardman could not have been all that voluminous. The town boasts a population of just over 3,300 persons.