Even though much of the world economy is at a standstill and millions sit idle due to COVID-19, fraudsters are still hard at work.
According to a special report, Impacts of Global E-Commerce and Fraud Trends Amid Coronavirus, released by e-commerce fraud-prevention provider Forter, as consumers have shifted their purchases online and begun working from home en masse, fraudsters are taking full advantage.
“Merchants are scrambling to cut costs, reduce the impact of fraud, scale efficiently, and deliver a consistent customer experience to meet rising consumer online buying behavior,” said Michael Reitblat, CEO and cofounder of Forter, in a statement.
Merchants experiencing a surge in online activity are struggling to detect fraud, the report said. There has been a “marked increase” in social engineering fraud, such as spoofed emails from HR and other corporate email addresses. Just like most other phishing scams, the fraudsters are telling people to click a link for more information. When they do, they are taken to a malicious website. Typically, these sites are looking to steal personal information or execute malicious code in the form of scripts on vulnerable devices.
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Because many retailers are closed for the foreseeable future, online shopping has exploded. This has led to an increase in gift card purchases and gift card fraud. “Fraudsters have noticed an increased demand of the completely virtual merchandise that is easy to monetize,” the company said.
Since work-from-home (WFH) and stay-at-home orders began being issued in March, Forter has noted a significant increase in online transaction volume for the following sectors:
- Apparel and accessories: 36%
- Beauty: 107%
- Food and beverage: 134%
- Grocery and delivery: 225%
- Virtual coins: 41%
- Video games: 54%
Because of these trends and the fact that many people are not familiar with the tactics online that fraudsters use, “… individuals are more available than ever before and expect to be contacted by customer support or service teams via electronic communications, since most physical contact is forbidden (i.e., banks, infrastructure, etc.),” the report said.
Fraudsters also are using COVID-19 warnings and updates from US embassies to obtain personal information through spoofed websites and phishing emails.
“Given these unprecedented times,” the report said, “merchants who did not previously consider e-commerce to be a priority for their business will now see it as a necessary and valuable platform. Merchants who already had online channels in place may not be adequately prepared to meet the challenges of such tremendous volumes of online activity.”