The holiday shopping season is bringing out more online criminals as well as shoppers, resulting in targeted efforts to steal consumers’ identity and payment card account information through gift card scams and e-mail phishing attacks, payments security experts say.
Retail Decisions, a provider of payment card issuing, processing and fraud prevention services, is predicting that online criminals this holiday shopping season will target gift cards as their top scam.
“It has become increasingly easy for criminals to fraudulently load value onto gift cards,” says Carl Clump, CEO of Retail Decisions. “During the third quarter of 2007, our statistics revealed that 11% of all attempted card fraud at retailers throughout the world, using our ReD Shield card fraud prevention service, was on gift card transactions.”
One way criminals operate online gift card scams is to offer the cards at deep discounts on web sites or through e-mail offers, then use application forms to steal consumers’ personal identity and payment card account information, according to MarkMonitor, a provider of software and services that track how brands are used in phishing attacks and other fraudulent efforts.
Clump adds that electronic games, consumer electronics and apparel also are highly susceptible to being purchased online fraudulently this year, based on online fraud data Retail Decisions has compiled so far this year.
From June through November of this year, Retail Decisions has recorded a 38% year-over-year increase in attempted online fraud. This compares to a 29% year-over-year rise in the total volume of transactions during the same period. “In other words, fraud attempts are increasing more rapidly than the market is expanding,” Clump says.
In addition to online gift card scams, criminals are also increasing holiday season e-mail phishing attacks, which mimic legitimate brands of retailers and other types of companies to trick consumers into revealing personal information that can be used to make fraudulent online payment transactions, says Irfan Salim, president and chief executive officer of MarkMonitor.
“As the holidays approach, buyers should be wary of online scammers and irresponsible vendors who are abusing reputable brands to make a profit,” Salim says.
In the fourth quarter through mid-November, the number of phishing attacks against retailers and services companies jumped 1,100% over the third quarter, MarkMonitor says. It adds that online retailers and auction sites now comprise 39% of all phishing attacks, it adds.
The Anti-Phishing Working Group, a non-profit organization dedicated to monitoring and fighting Internet fraud, said this month that it had received 25,624 reports of unique phishing attacks in August, the latest month for which it has data, up more than 10% from July. The number of brands hijacked in phishing scams in August was 129, up from 126 in July, it adds.
The group also notes that the number of unique phishing sites—the web sites linked from phishing e-mail messages used to capture consumer information—totaled 32,079 in August, up from about 30,000 in July. The highest concentration of phishing web sites during August, or 25.7%, was in the U.S., followed by China, it adds.
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