State of Fraud
report 2023
As retail continues to innovate, so too do those who represent industry threats
This report explores emerging fraud trends and provides actionable insights and best practices for retailers planning their response to the new — and increasingly treacherous — fraudsters of 2023.
State of Fraud report 2023
As retail continues to innovate, so too do those who represent industry threats
This report explores emerging fraud trends and provides actionable insights and best practices for retailers planning their response to the new — and increasingly treacherous — fraudsters of 2023.
2023 will be a year of unprecedented innovation in the field of online fraud. A series of events have converged sparking heightened motivation to professional fraudsters and to everyday consumers wrestling with tight budgets and desires that outstrip their means.
Based on an analysis of data from Signifyd’s Commerce Network of thousands of retailers, this report explores emerging fraud trends and the tactics to help retailers protect their business and revenue.
Key findings from the report
ATO machines are on the rise
New and more diabolical account takeover methods
Bots have long been key in fraud rings’ account takeover efforts. Automated card stuffing enabled fraudsters to probe and breach accounts at scale. As automation and machine learning becomes more powerful and affordable, professional fraud rings are upping their fraud game.
In 2023 it is more important than ever for merchants to understand the identity and intent behind every transaction to protect against fraud and maintain a positive customer experience.
Account takeover on the rise
Aged account fraud pressure (ATO fraud pressure)
The blossoming of policy abuse
Pros and novices alike are attacking more of the buying journey
As consumers have become more comfortable shopping online, they’ve also become more comfortable gaming the system. Rising prices, heightened expectations and a tough economy have combined to knock consumers’ moral compasses out of kilter.
In fact, consumer abuse is fast becoming a bigger problem than payment fraud for merchants — and both are growing. In 2022, Signifyd saw consumer abuse increase 36%, while fraud pressure, a measure of payments fraud, was up 34%.
False claims about credit card charges, fulfillment and product quality, along with return fraud and abuse are squeezing retailers’ margins.
The rise of friendly fraud
Consumer abuse claims year over year
Consumer Abuse
2022
Consumer Abuse
2022
Risk is about revenue
The game is optimization, not only mitigation
Ecommerce margins for some time have been getting squeezed by the increasing costs of customer acquisition and fulfillment. And now we can throw inflation into the mix — suppressing consumer spending and raising retailers’ costs. All of which makes untapped revenue potential all the more important and inviting.
Today, risk managers are evolving into business optimizers, finding ways to approve more orders and maximize revenue.
Analysts have pointed to billions in lost revenue from false declines alone. Modern risk teams are winning that money back while widening their mandate to break down data silos so as to improve bank authorization rates and build better customer experiences.
Optimizing payments is key
State of Fraud report 2023
Download the report for an in-depth look into the 2023 fraud trends shaking up ecommerce retailers.
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