Research in the field shows there has been a spike in account takeover (ATO) attacks for online payment accounts with the Apparel and Food and Beverages industries. The highest spikes in fraud at 69.9% and 49.8% respectively was between Q4 2015 to Q4 2016.
According to the 2017 Fraud Attack Index, spike followed the October 2015 EMV chip adoption deadline in the US. A 79% increase in the risk of fraud for domestic holiday orders was registered, according to the study conducted by a fraud prevention services company.
Account takeover is still a problem for the CNP payments industry. The research found out that individual merchant accounts were being less attacked from 2015 to 2016, however, takeovers of online payment accounts such as PayPal, Apple Pay, Amazon Payments grew 131% in 2016 as compared to 2015.
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According to the authors of the report, the reason for spike may be associated with increased general usage of alternative payment options mentioned above.
Based on the report, the overall fraud attack rate grew 8.9% in 2016, which is now continuing with a moderate but steady growth in fraud as more online transactions are being completed and EMV continues to roll out.
When it comes to the Apparel industry, it saw a 70% increase in the rate of fraud attacks. Attack rates also rose 49.8% in the Food and Beverages industries. Attacks on digital goods providers and the Travel and Hospitality industry decreased significantly.
According to CEO of the above-mentioned anti-fraud technology providing company, the significant growth in fraud attack rate in the Apparel industry may be associated with the new fraudsters who’ve joined the online criminal community after EMV adoption in the US and maybe are choosing a sector they make sense of. Additionally, the increase may also stem from the fact that genuine shoppers feel more comfortable about buying fashion items online and returning as necessary.