A new LexisNexis Risk Solutions report on the retail market has concluded that fraud is getting worse, with fraud attempts tripling since 2017. The True Cost of Fraud report examined online and brick-and-mortar sellers, and concluded that merchants paid $3.13 for every dollar lost to fraud, a number that is up 6.5 percent from last year’s $2.94 figure.
According to LexisNexis Risk Solutions, fraudsters are increasingly targeting smaller retailers, many of which have started offering digital goods but do not yet have the robust security infrastructure of a larger organization. That makes them vulnerable to automated botnets and synthetic identities, the latter of which was identified as the biggest challenge facing online retailers.
“There currently exists a perfect storm of cross-border, digital and mobile fraud and executives are under pressure to stem escalating losses,” said LexisNexis Risk Solutions VP Kimberly Sutherland. “Those using a layered solution involving identity authentication, transaction verification, digital identity tools and behavioral biometrics are better prepared to fight fraud.”
In addition to tripling since 2017, LexisNexis Risk Solutions also reported that fraud attempts have doubled year-over-year, which emphasizes the importance of digital security for organizations of all sizes. Biometric authentication can be particularly helpful in that regard, with companies like HSBC incorporating behavioral biometrics to safeguard retail transactions.
Retail is not the only industry struggling with fraud. A separate LexisNexis Risk Solutions report recently found that many healthcare providers overestimate their security capabilities.
September 24, 2019 – by Eric Weiss