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Social distancing from the coronavirus outbreak prompted many consumers to go online for purchases, but a new TransUnion survey also found 22% of Americans have been targeted by digital fraud related to the outbreak.

TransUnion’s “Global Fraud & Identity Solutions” released new research surrounding the coronavirus shopping and fraud impacts. “It is clear that social distancing has changed consumer shopping behaviors globally and will continue to do so for the foreseeable future,” Greg Pierson, SVP of business planning and development at TransUnion, said. “No doubt fraudsters will continue to follow the trends of good consumers and adjust their schemes accordingly.”

TransUnion, a Chicago-based financial information firm, found a 23% increase in global e-commerce transactions in the week following the World Health Organization declaring the novel coronavirus outbreak a pandemic on March 11, compared to the average weekly volume in 2020.

In a recent survey of 1,068 Americans 18 and older, TransUnion also found a 22% increase in those targeted by COVID-19-related digital fraud in the week following the WHO declaring the coronavirus outbreak a pandemic on March 11 compared to the average weekly volume in 2020.

TransUnion recommended, “To address the challenges and changes in shopping patterns resulting from this pandemic, and other trends, retailers must be prepared to combat fraud while providing great experiences on their web and mobile platforms. However, a pattern shift to e-commerce is not without opportunity for retailers.”

Prior to the outbreak, fraudsters involved themselves in multiple schemes. TransUnion’s coronavirus-related findings came as it also released its “Global E-Commerce in 2020” report, in which it reported a 347% increase in account takeover and 391% rise in shipping fraud attempts globally against its online retail customers from 2018 to 2019, prior to the outbreak.

“With so many reported data breaches, it’s not just about if your account will be hijacked, it’s about when,” Melissa Gaddis, senior director of customer success for TransUnion’s fraud and identity solutions, said. “Once a fraudster breaks into an account, they have access to everything imaginable resulting in stolen credit card numbers and reward points, fraudulent purchases and redirecting shipments to other addresses.”

Typical methods used to take over an account include buying login details on the dark web, credential stuffing, hacking, phishing, romance scams and social engineering. Shipping fraud is when criminals take over a customer account but do not change the shipping address in order to avoid detection. Once the package has shipped, they intercept it at the carrier site and change the shipping address.

Besides account takeover and shipping fraud, TransUnion revealed other significant e-commerce fraud and transaction trends:

  • A 42% decrease in promotion abuse from 2018 to 2019. Cybercriminals access accounts to drain loyalty points or create multiple new accounts to use the same promotion over and over, often against website and app terms. “TransUnion believes this decrease can be attributed to fraudsters turning to more lucrative schemes such as account takeover.”
  • Seventy-eight percent of all e-commerce transactions came from mobile devices in 2019. That is a 33% increase from 2018. E-commerce companies are scrambling to ensure a mobile-first experience for consumers not just to browse but to buy.
  • A 118% increase in risky transactions from mobile devices in 2019. Fraudsters have taken notice that more e-commerce transactions are coming from mobile devices and are trying to replicate that consumer behavior in order to avoid detection.

“Although the death of brick and mortar has been well documented, there is still plenty of room for e-commerce growth with one report claiming online retail only makes up 14% of all global retail sales,” Gaddis said. “With so much room left for growth, it’s important that retailers stay ahead of the emerging transaction and retail trends to provide a friction-right experience for consumers and a fraudster-proof barrier.”