Chargebacks911: eCommerce Merchants Face Growing Costs Amid Rising Identity Theft Fraud

TAMPA BAY, Fla., Oct. 16, 2017 /PRNewswire-iReach/ -- A recent study by Javelin Strategy & Research revealed that identity fraud increased 16% from 2015 to 2016, impacting a record 15.4 million U.S. consumers at a cost of $16 billion.⁽¹⁾ Yet a MagnifyMoney survey found that 96% of consumers never had to pay a dime in credit card fraud losses, since banks and merchants absorbed the costs.⁽²⁾ Chargebacks911, a leading dispute mitigation and loss prevention firm, warns that rising identity theft fraud will lead to growing losses for eCommerce merchants unless they take direct action to identify and halt fraudulent orders.

According to the Javelin study, the number of U.S. fraud victims rose by 2.3 million from 2015 to 2016, while fraud losses climbed by $700 million. Account takeover fraud alone cost $2.3 billion in 2016, a 61% increase over the prior year, while the incidence rate jumped 31%. And though point-of-sale (POS) fraud remained virtually unchanged from 2014 and 2015 levels, Javelin reported that card-not-present (CNP) fraud soared 40% year-over-year.⁽¹⁾ Meanwhile, the MagnifyMoney survey found that more than 1 in 5 consumers (22.1%) had experienced credit card fraud. In most cases?93%?consumers were victims of account takeover rather than identity takeover, meaning that fraudsters made purchases on an existing account as opposed to opening a new account in the victim's name.⁽²⁾ 

"eCommerce merchants face a growing liability for identity fraud. As the number of victims and financial burdens continue to rise, retailers are likely to experience mounting losses unless they take immediate action to prevent fraud," explained Monica Eaton-Cardone, co-founder and Chief Operating Officer (COO) of Chargebacks911. "While EMV chip technology has reduced fraud at brick-and-mortar stores, it has driven more fraud online. Furthermore, banks assume liability for point-of-sale fraud when retailers use chip-enabled card readers, but online merchants don't have those same protections?so it's up to them to take proactive steps to combat fraud."

Eaton-Cardone says there are a number of measures eCommerce merchants can implement to minimize their fraud risks and losses.

1. Require card verification codes. Since EMV chips only work for POS card readers, online retailers should always require and validate a card verification value (CVV) code for every order.

2. Apply fraud screening. In cases of high-value orders and other high-risk transactions (such as overseas purchases or digital downloads), merchants should consider more stringent screening of orders and manual review.

3. Require signature upon delivery. Using a shipping method that requires a signature can deter fraudsters who want to avoid being linked to a physical address. It also prevents opportunistic thefts of packages left on porches.

4. Ensure data security. eCommerce merchants should always conduct transactions over a secure website (https) and protect customers' data both during and after the order process to prevent unauthorized account access.

5. Employ loss prevention services. As fraudsters' tools and tactics continue to evolve, many eCommerce merchants have found that partnering with a reputable loss prevention, risk mitigation and chargeback management firm is the most effective and cost-efficient solution.

Chargebacks911 is dedicated to educating and supporting eCommerce merchants with services designed to increase profits, reduce chargebacks and fight fraud. To that end, Monica Eaton-Cardone and her team will be participating in a number of upcoming industry events, including TravelConnect 2017 in Washington, DC, PerformanceIN Live 2017 in London and Money 20/20 Las Vegas. For details on Chargebacks911's comprehensive risk management solutions, informative articles and other merchant resources, visit https://chargebacks911.com.

About Chargebacks911:

Founded in 2011, Chargebacks911 is the first global company fully dedicated to mitigating chargeback risk and eliminating chargeback fraud. As industry-leading innovators, Chargebacks911 is credited with developing the most effective strategies for helping merchants maximize revenue and fight fraud in a variety of industries, including e-commerce, retail, digital and travel. The company's innovative solutions and exemplary customer service has earned a vast array of prestigious awards and honors, including the Customer's Choice Best Chargeback Management award from the CNP Expo and the Best Industry Solution award from Airline Information.

Chargebacks911's unparalleled category experience and ISDtm technology quickly identifies the true source of chargebacks, recovers lost revenue, mediates disputes, safeguards the merchants' reputation, monitors transactions 24/7 and helps proactively prevent future fraud. A division of Global Risk Technologies, Chargebacks911 is headquartered in Tampa Bay, Florida, with offices throughout North America, Europe and Asia. To learn more about Chargebacks911, visit https://chargebacks911.com or call 877.634.9808.

1. Javelin Strategy & Research. "Identity Fraud Hits Record High With 15.4 Million U.S. Victims in 2016..."; press release issued February 1, 2017. javelinstrategy.com/press-release/identity-fraud-hits-record-high-154-million-us-victims-2016-16-percent-according-new

MagnifyMoney. "National Credit Card Fraud Survey"; MagnifyMoney Studies; May 2, 2016. magnifymoney.com/resource/studies/national-credit-card-fraud-survey/

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SOURCE Chargebacks911