Thursday, May 18, 2017

This Is the New ‘Wild West’ of Retail Fraud

From: eMarketer.Retail

The rollout of EMV chip cards in recent years may have deterred criminals from making fraudulent in-store purchases, but it hasn’t stopped them dead in their tracks. They simply found a new target: call centers.

Call center fraud rates have increased steadily every year since at least 2013 and more than doubled between 2015 and 2016, according to an annual call center fraud study by the research lab of Pindrop, which helps financial institutions and retailers battle call-center fraud. It counts among its investors Google Capital and Citi Ventures.

For retailers, so-called chargeback fraud is the most common: Criminals call a retailer, make a fraudulent purchase using someone else’s identity and credit card number, and have the product sent to another address. Loyalty cards also have surfaced as a major area of attack as criminals use them to cash out reward points, said David Dewey, director of research at Pindrop Labs, in an interview.

The report, which studied more than half a billion actual call center calls, mostly in the US, and most of them involving companies that receive an average of 40 million calls a year, found that the fraud rate surged to 1 in 937 calls in 2016, up from 1 in 2,000 in 2015, and 1 in 2,200 in 2014. While every industry in the study is seeing increased fraudulent activity, the retail industry has an unusually high incidence rate.

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