Over Holidays 11.4M Fraudulent Transactions Stopped in Their Tracks by ThreatMetrix

Posted January 5, 2015

Over Holidays 11.4M Fraudulent Transactions Stopped in Their Tracks by ThreatMetrix


During Xmas Week, ThreatMetrix Finds Existing Account Logins Growing to 80 Percent as Customers Return to Trusted Sites

In addition to the ThreatMetrix Global Trust Intelligence Network (The Network) preventing more than 11.4 million attempted fraudulent transactions over the holidays, data from The Network showed that over Christmas Week (Dec. 20 – 28) there was a continuing shift toward mobile shopping (specifically on iPhones) and an increased number of logins to trusted retailers.

Final holiday-week spending surge

According to ComScore, the final week leading up to Christmas saw an 18 percent hike in spending over 2013. This increase in last-minute shopping leading up to the holidays was followed by continued shopping directly after – consumers using gift cards, making additional purchases following returns, etc. Looking to cash in on the increased spending, cybercriminals were also exceptionally busy over the same period.

Ken Jochims, ThreatMetrix’s director of product marketing, notes

“The week before Christmas was full of last-minute shoppers who were too busy to finish all their shopping until the holiday week, and many of those shoppers turned to online channels up until the last minute,” said Ken Jochims, director of product marketing at ThreatMetrix. “Cybercriminals follow the money – especially around the holidays. Fortunately, The Network prevented millions of fraudulent transactions this holiday season, saving hundreds of millions of dollars in fraud losses for our customers.”

Using data from The Network, several key trends in online spending over Christmas Week emerged including:

  • Consumers return to familiar retailer sites – Over the week of Thanksgiving, data from The Network showed 61 percent of all analyzed transactions were logins to existing retail accounts. And, during the Christmas shopping week, logins to existing retail accounts grew to more than 73 percent. Customers return more frequently to sites they know and trust with their stored credit card information.

“Customers returned to trusted sites to make purchases throughout the holidays,” said Jochims. “But maintaining trust requires a high level of security that needs to be transparently applied without disrupting the shopping experience. Dialing up security while decreasing friction is a challenging requirement that can only be accomplished by implementing a security solution that can deliver real-time fraud prevention based on contextual intelligence. Retailers need to ensure that only trusted customers create and access accounts so they can easily make repeat purchases throughout the year – while keeping the bad guys out. ThreatMetrix delivers this protection year round protecting major retailers from all types of fraudulent activity, accelerating commerce and creating trust.”

  • Mobile transactions continued to grow, dominated by iOS – During Cyber Week 2014, ThreatMetrix found that 39 percent of transactions originated from mobile devices, with 80 percent of those transactions originating from iOS devices. Over the week of Christmas, that shift toward mobile continued with a peak in mobile transactions taking place on Christmas Day (about 35 percent). Additionally, iPhones alone drove almost three-quarters of all mobile e-commerce transactions during Christmas Week, up from 65 percent on Cyber Monday.

Approximately 63.9 million iPhone 6 devices have been sold since the iPhone’s September release. Likely, there is a correlation between the number of phones sold and the iPhone dominating mobile purchasing.

The Network also detected a general pattern in mobile usage. It was low on Mondays, gradually climbed through the week with a boost on Saturdays and peaking on Sundays. On Monday, mobile usage tapered off again.

  • Transaction volumes were significantly higher during Cyber Week – During the five day period beginning Nov. 27 and ending Dec. 1, online spending grew to approximately $6.46 billion while the week of Christmas only saw about $5.8 billion in sales. Through data from The Network, ThreatMetrix saw a surge in shopping through Monday, Dec. 22. However, after the 22nd, it dropped off. This was expected. That’s because in the days directly leading up to Dec. 25, online merchants were busy scrambling to make deliveries by Christmas.

After Christmas Eve, dollar transactions continued to drop because people were, for the most part, done with their holiday shopping. Instead, they began redeeming gift cards.

In the four weeks between Thanksgiving Day and Christmas Day, analysis of The Network’s data found that Mondays generally had the highest number of transactions as well as the highest dollar value per transaction.

“It appears consumers are comfortable getting back to work and shopping online on Mondays,” said Jochims. “Consumers making online purchases on the weekends are often doing so from mobile devices or tablets in front of the TV or on-the-go, but on Monday they shop from desktop computers, where the data also shows consumers typically make larger purchases.”

  • Device spoofing was the most common type of cyberattack – Over Christmas Week, The Network saw device spoofing accounting for the largest number of cyberattacks hovering around 6 percent. Those attacks were followed by identity spoofing at about 4 to 5 percent, and geo-location spoofing, which grew to almost 4 percent on Christmas Day.

Account creation fraud also grew 30 percent during Christmas Week while account login and payment fraud were both down slightly over the holiday.

The Network saved hundreds of millions of dollars over the holidays

ThreatMetrix was able to help stop more than 11 million attempted fraudulent transactions – equating to hundreds of millions of dollars. This was accomplished through the collective intelligence of ThreatMetrix’s global data repository, The Network, which analyzes more than 850 million monthly transactions, and protects more than 210 million active user accounts across 3,000 customers and 15,000 websites. The Network is the most comprehensive data repository of its kind, using its real-time analytics to evaluate logins, payments, new account registrations, remote access attempts and other transactions for validity.

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