Holiday Season Sees Rise in Suspected Online Payments Fraud

While consumers spent nearly $3 billion holiday shopping on their smartphones this year, more than any other Black Friday and Cyber Monday in history, a new report from iovation has found that suspected online retail fraud has also increased this holiday season.

According to the report, suspected online retail fraud increased 29 percent during the start of the 2019 holiday season when compared to the same period in 2018. What’s more, the report indicated a 60 percent increase in suspected ecommerce fraud during the same period from 2017 to 2019.

The growth in suspected online fraud means that 15 percent of total suspected fraud during the holiday season so far took place online, up from 13 percent in 2018 and 11 percent in 2017. Online fraud in general accounts for 10 percent of suspected fraud across the rest of 2019, the report found.

“This data unfortunately reinforces the fraud fears that consumers expressed in our recent survey,” said TransUnion Senior Vice President of Business Planning and Development, Greg Pierson, in a press release. “Among the conclusions from TransUnion’s 2019 Holiday Retail Fraud Survey: nearly half of all consumers, 46%, are concerned with being victimized by fraudsters this holiday season with baby boomers being the most concerned of any generation at 54%.”

According to the report, Black Friday saw both the highest percentage of legitimate and suspected fraud transactions between Thanksgiving Day and Cyber Monday. The iovation report indicates that one in four suspected fraudulent online charges across the holiday weekend were made on Black Friday.

The iovation report also found that while smartphones are growing rapidly in popularity among consumers for making convenient online purchases, a mobile phone or tablet appeared to be used for 63% of all suspected fraudulent e-commerce transactions during the long holiday shopping weekend compared to 59% from the same period in 2018 and 51% from the same period in 2017.