Retailers will still sell, but as web-connected products generate a wealth of information about consumers, online merchants will want to rethink their role beyond ...
At least 10% of the time purchases are made with multiple merchants, says Ethoca.
A criminal armed with a stolen credit card is likely to use it to make fraudulent purchases at more than one web merchant, according to a new study by Ethoca, a provider of a service that shares data among merchants and credit card issuers.
In at least 10% of the cases studied, a stolen card was used to commit fraud at more than one e-commerce site according to the study. And that’s a conservative estimate, Ethoca says, because the study only tracked 95 e-retailers that were enrolled in Ethoca’s Issuer Confirmed Alerts Service during the study period, June to October 2010. “It is likely that merchants not participating in Ethoca’s program also experienced attacks from the same fraudsters, which would increase the estimates,” the report says.
The study also found that in 86% of the cases the criminal stopped using the stolen card within 24 hours of making the first fraudulent purchase. In some cases that was because the bank that issued the card canceled it during that time period, the report says.
The report also found that criminals did not limit themselves to particular merchandise categories when using a stolen card, but used the cards at the web sites of merchants of many types.
“Our research shows not only the importance of sharing data, but how quickly it needs to be shared in order to be effective, and what kind of difference it makes to share it across industries,” says Daniele Micci-Barreca, co-author of the report and a principal at consulting firm Elite Analytics, “Merchants who share data should do so in real-time or near real-time. With speed, digital goods and services can be shut down before the thief is able to get or use them.” Julie Fergerson, vice president of emerging technologies at Ethoca, was the other author of the report.
The report, “Fraud Attacks Cross Industries,” is based on an analysis of 25,188 instances of fraud confirmed by card issuers. The 95 merchants studied account for 61% of the revenue of the 500 online retailers listed in the current edition of the Internet Retailer Top 500 Guide, Ethoca says.