It was a record-setting holiday shopping weekend. Cyber Monday turned out to be the biggest day in e-commerce history, with $3.4 billion spent. But along with those record setting dollars, experts say it was also a time for record-setting fraud.
Portland based anti-fraud company iovation tracked tens of millions of online transaction and said the numbers are staggering.
“Lots of increased traffic online and lots of increased fraud,” said iovation's Chief Technology Officer Scott Waddell. “People are increasingly going online and we are seeing a shift in fraud from the brick and mortar stores at the mall to online fraud.”
Iovation says 59 percent of all fraudulent transactions from Black Friday to Cyber Monday involved a credit card. That’s a 20 percent increase from 2015 and a 34 percent increase from 2014.
The reason may involve those EMV chips on the credit cards, intended to make transactions safer and more secure. They work -- but only in stores. EMV chips do nothing to protect consumers when they’re shopping online. And scammers know it, so they’re focusing their illegal activity on online shoppers.
Experts like Waddell say online retailers need to make things more secure.
“They’ve got to start thinking about multi-factor authentication as part of the strategy. Get those users to develop a relationship with you, develop persistent accounts, more of the Amazon-like experience where you’re logging-in, you’re helping them remember what they’ve bought in the past and develop that relationship.”
In addition, iovation says 55 percent of all online retail transactions were made from a mobile device from Black Friday to Cyber Monday. And that can mean the mobile devices are logging in to non-secure signals.
Using a credit card is the best practice. Waddell says using your debit card online can literally give scammers access to your checking account.
“It’s not just Cyber Monday anymore, it’s becoming Cyber week. You’re seeing that in promotions. We saw a 29-percent year over year growth in transaction volume on Black Friday for online shopping,” Waddell said.