The Equifax breach threatens to boost holiday season payment fraud
The holiday shopping season is always a big gift to fraudsters. Meanwhile retailers rarely get what's on their lists— i.e. more revenue, fewer chargebacks, and stronger customer relationships.
Unfortunately, the holiday-season fraud problem is growing year over year. There was a huge spike in e-commerce fraud between 2015 and last year, reaching 33%, according to Experian. The problem could be even worse this year, thanks to a new round of consumer data breaches, including the huge Equifax breach that exposed protected data on more than 145 million Americans. To make the holiday season safer, there are steps you can take now to review and reinforce your store's fraud-prevention practices.
Account takeover fraud, in which criminals hack into store customers' accounts to make their own purchases, was already on the rise before thieves gained access to Equifax data. Now, fraudsters have much more data they can use to identify vulnerable accounts, access them, change the email address and password, and go shopping on the customer's cards. This can lead to major chargeback losses for merchants as well as damaged relationships with customers.
To detect account takeover fraud, you will need to use multiple factors to verify the customer's identity each time they shop with you. Logins from new devices, larger than usual orders, dramatic location changes, and multiple attempts to log in are some of the indicators that the order needs manual verification. You can also configure your site to lock customer accounts after several failed login attempts and send an alert to their email or smartphone.