Fraud prevention companies must tighten grip as payment frauds surge amid holidays

By Puja Sharma

SEON is advising online businesses to batten down the hatches, as online crooks prepare to make one final fraudulent push before the holidays. Leveraging its data and customer insights, the company believes more fraud attempts will be made during the week of 12th December than in any other week in 2022.

In the final run-up to the holidays, fraud prevention companies, and online businesses must brace for one last surge in fraud attempts. That’s because last year, during the week of 12th December, the company’s system declined more than 100,000 transactions per day for merchants in the eCommerce, iGaming, and online loan sectors. There are expected to be even bigger numbers in 2022, as fraudsters look to take advantage ahead of the big day.

However, unlike Black Friday and Cyber Monday, which see particularly big increases in fraud attempts targeted at eCommerce merchants, the run-up to Christmas is dominated by online crooks attempting to defraud iGaming providers. Fraudsters don’t have much faith in their local post service to deliver their stolen goods in time for Christmas and would rather use their nefarious methods to generate cash and bonuses instead.

As reported by IBS Intelligence, This growing ‘industrialisation’ of digital fraud is seeing fraudsters increasingly working together, conducting fraud attacks in organised networks, across sectors and borders, using sophisticated automated tools and dark web intelligence, to commit theft.

Without effective online fraud prevention in place, lending companies could be about to suffer greatly in the lead-up to Christmas. Unfortunately, huge discounts have given criminals the upper hand this festive season.

Businesses must therefore ensure they are doing all they can to protect themselves and consumers from fraud risks, by implementing technologies that can accurately distinguish between trusted and fraudulent customer behaviour, without interrupting the customer journey. Particularly in the race to onboard and checkout customers during the festive retail season, BNPL payment providers and online retailers must take care not to overlook the potential risks associated with this emerging payment option.

This change in target seems to also influence the methods that fraudsters use during this period. Whereas during Black Friday weekend, when online crooks look to utilize fake accounts, the week of 12th December sees SEON’s system flagging a big rise in suspicious web browser profiles. In practice, this means user accounts with suspiciously old browser versions or ones that demonstrate behaviors associated with online bots.

Speaking on the trends, Tamas Kadar, CEO, and Co-Founder of SEON said, “The run-up to the holidays is busy for everyone, including online fraudsters. Any business expecting a holiday from this threat will be disappointed by our research, which highlights the week of 12th December as being the busiest single week for online fraud attempts of the year. Thankfully, solutions like ours can help in the fight back against this challenge.”

Key Highlights

• The percentage of average declined payments was higher during the week of 12th December than any other week in 2021 due to elevated fraud risk.
• There was a 255% increase in bot usage on fraud attempts during this period in 2021, which should be expected again in 2022.
• Unlike Black Friday weekend, where eCommerce merchants are mainly targeted, fraudsters are more likely to attack iGaming providers in the run-up to Christmas as they prioritize cash over products.