This is an extract of Bruno Spanguolo’s publication in the SECURITY Magazine. You can read the full article here.
During the last several weeks of the pandemic, certain retail sectors have been more susceptible to fraud than others.
With stay-at-home orders forcing consumers to limit physical stores visits, food-delivery services and grocers are seeing an influx in overall demand and online orders. Forter, which supplies fraud-prevention technology to online merchants, says new accounts now represent 15% to 25% of all customer volume. The increase of new online buyers creates an expectations gap, which traditionally results in increased service-chargeback rates.
Home entertainment options are increasingly in the crosshairs of scammers as well. Streaming platforms such as Netflix and Disney+ have seen an influx of new subscribers the past several weeks. Video game sales during that period, meanwhile, have reached heights usually reserved for the holiday season. Unfortunately, such trends also mean an uptick in payments-related fraud as consumers upgrade their entertainment options. At dLocal, for example, we’ve seen fraud increase 119% with gaming and streaming-entertainment companies.
Which countries are affected the most?
Emerging markets like Mexico, India and Brazil have emerged as fertile geographies for fraud growth. Their susceptibility is owed to a variety of factors, such as a wide social disparity and loose anti-fraud laws. Online fraud in Mexico has ballooned an astounding 263 percent during the last three months, according to dLocal data, while India is experiencing a fraud increase of 111 percent over the same period.
What should merchants prioritize now?
eCommerce merchants now more than ever need to be aware of current fraud trends and should be having conversations with their partners and service providers to establish strategies to mitigate and prevent losses. Merchants should take an inventory of what they need to combat these issues going forward. And it all starts with having a robust fraud-protection system in place that can easily be updated to handle new threats.
Bruno Spagnuolo is dLocal’s Head of Fraud Prevention at dLocal.
He has been leading fraud prevention at dLocal protecting eCommerce in LATAM and other emerging countries, such as India, Turkey, Nigeria, Indonesia and South Africa/Prior to dLocal, Bruno worked for eight years in a similar role at Despegar, LATAM’s leader in the travel industry.