The Clearsale Blog

Why is the auto parts industry an increasingly target for CNP fraud?

Why is the auto parts industry an increasingly target for CNP fraud?

Why is the auto parts industry an increasingly appealing target for CNP fraud? How can online retailers fight back? We explain via About-Fraud.com

The global automotive aftermarket business is growing fast, and it’s an increasingly appealing target for card-not-present (CNP) fraud. By 2023, the total value of the industry will exceed $1 trillion, thanks in part to the rapid growth in e-commerce for auto parts and accessories.

The projected compound annual growth rate (CAGR) for online aftermarket auto parts sales from 2018 through 2022 is nearly 19%. The bulk of that growth will come from consumers, hobbyists, and small automotive-related businesses. However, there are some clear reasons why the auto parts industry in particular attracts fraudsters and some ways online retailers can fight back.

What are auto parts fraudsters after?

It’s important to understand that even though some lone wolf individuals use stolen card data to get products for themselves, the vast majority of CNP fraud comes from organized criminals intent on reselling products on a large scale. This may come as a surprise, considering the number and size of auto parts complicates their storage, handling, listing, and shipping costs for re-selling them on and off- line. But organized criminals work around the problem of complex logistics by selectively targeting certain types of auto parts and then selling them to corrupt middlemen. These middlemen mark up the stolen parts and sell them to auto repair shops who pay below-market rates for these stolen parts but bill insurers for the full price of new parts. Other thieves re-sell stolen parts online or offer them locally on sites like Craigslist.

Due to market demand, criminal groups are more likely to go after items for the top-selling makes and models, such as the Honda Civic, instead of parts for rarer cars like the Maserati Ghibli. That being said, some fraudsters do specialize in parts associated with luxury brands, as well as the accessories and electronics that go into high-end customizations. Thanks to the popularity of car modding, there’s a thriving niche demand for unusual wheels, bumpers, and exhausts, as well as for the parts needed to “tune-up” a car to enhance performance.

It’s also important to know that the high cost of shipping auto parts, compared to most other goods sold online, doesn’t impact fraudsters the way it does to most legitimate consumers because they’re not using their own money to make purchases. That may be one of the reasons why the typical fraudulent automotive parts order in 2014 had an average value of nearly $1,700, significantly higher than the $1,000 average fraudulent order for all goods.

Click here to continue reading

Merchant Guide for E-Commerce Fraud Protection

You may also like

How Partnerships Can Improve Your B2B Customer Experience

How Partnerships Can Improve Your B2B Customer Experience

After 2020’s dramatic shift to online commerce, many B2B buyers now expect more than ever in terms of service and purchase options and customer experience. A 2020 Salesforce survey found that 69..

The pandemic accelerated retail's digital transformation. Where do we stand now?

The pandemic accelerated retail's digital transformation. Where do we stand now?

As the pandemic prompts consumers to seek contactless digital retail options, merchants must keep pace with customers’ expectations, stay on top of recent technology and understand the evolution..

The Data Balance: How to Deliver Privacy and Personalization

The Data Balance: How to Deliver Privacy and Personalization

As we rely more on digital commerce in our daily lives, customers are raising their expectations for both customer experience (CX) and data privacy. For example, 62% of customers prefer..

FeaturedCustomers Names ClearSale as Top Performer in Summer 2021 Report

FeaturedCustomers Names ClearSale as Top Performer in Summer 2021 Report

Innovative global fraud protection organization awarded as industry Top Performer in the Customer Success Report

Turning The Clock Back on Fraud

Turning The Clock Back on Fraud

How will companies be able to get fraud to return to pre-pandemic levels as we ease back into something more resembling normal? Rafael Lourenco, EVP at ClearSale, give his take

Global Markets Watch: 11 Post-Pandemic Ecommerce Markets to Track

Global Markets Watch: 11 Post-Pandemic Ecommerce Markets to Track

In previous years’ iterations of this post, we’ve pointed to data showing an evenly-paced growth trajectory.

But things have changed. Global markets are no longer focused on planning for..

New Fraud Prevention Issues for Retailers

New Fraud Prevention Issues for Retailers

Over the past year, merchants have experienced an increase in fraud volume as fraudsters employ new tactics to take advantage of businesses and consumers alike. At the same time, payments..

How the pandemic transformed the payments experience

How the pandemic transformed the payments experience

The pandemic remade the way we shop both online and in person. In the shops in 2020, consumers preferred to buy in touchless ways, and merchants had to get creative at times to keep up. Now, many..

CX strategies that will win you cross-border business

CX strategies that will win you cross-border business

When selling across borders, reassure shoppers their data is safe, offer payment, shipping and return options they want and don’t mistake customers for criminals.

Cross-border ecommerce had a big..

Want to write
for our blog?

Please review our writers' guidelines
https://www2.clear.sale/press/clearsale-guest-blog-guidelines
and then email guestwriter@clear.sale with your pitch!

Subscribe to our blog