In late 2015 the US finally followed much of the rest of the world when Visa and other card schemes switched the liability for fraud-related losses to retailers that have not upgraded their hardware for EMV.
Experian notes that the increase in e-commerce fraud follows a similar trend pattern from countries that previously rolled out EMV cards – UK, France, Australia, and Canada – that also saw gradual increases in card-not-present fraud.
“We suspect that the EMV liability switch and increased adoption by merchants of chip-and-pin enabled terminals have had a profound impact on driving up e-commerce attacks,” says the firm.
Fraudsters that typically relied on committing counterfeit fraud have shifted their focus to the digital channels where they could have more success, and as more attackers enter a rapidly growing mobile and online commerce space it becomes increasingly difficult for merchants to spot them.
This means that businesses need to expect the increase in e-commerce fraud to continue over time and to be prepared to deal with it by employing a multi-layered approach that pairs transactional data elements with details about the user and their device.
Experian says that the biggest component of credit card fraud trends is the fact that 2016 was a record year for data breaches. There were 1,093 breaches, a 40% increase from 2015, according to the Identity Theft Resource Center.
Meanwhile, the Federal Trade Commission recently revealed a jump in consumers who reported that their stolen data was used for credit card fraud, from 16% in 2015 to more than 32% in 2016.
The record number of data breaches is a signal that future fraudulent activities will take place, warns Experian.