Black hat online search marketing and traffic fraud can cost brands millions in the long run, but so can consumer fraud through ecommerce and in stores. The data science company Feedzai uses real-time, machine-based learning to provide analysis of data representing $750 billion in payment volume, and has found that Black Friday took the No. 1 spot for card fraud in 2013. The data represents more than 17.5 billion transactions with the card, present or not.
Obviously, fraudsters are big spenders. When a card is not present, the average fraudster spends about $900 per card in five days, but when the card is present the fraudsters take seven days to spend an average of $450.
When the card is not present (CNP), fraud spikes in November; when the card is present (CP) fraud spikes on Black Friday. In 2013, the 10 days with the most CNP fraud occurred in November. More than three times more CNP fraud occurs in November than in June, the month with the least CNP fraud. None of the top CNP fraud days in November fell on Black Friday because they were busy with CP fraud. Shoppers and fraudsters flood brick-and-mortar retailers on Black Friday, making it the day with the most CP fraud.
Believe it or not, fraud peaks at a specific hour in the day. The most CNP fraud occurs between 12 p.m. and 1 p.m., while CP fraud is more likely to occur between 4 p.m. and 5 p.m. The highest rate of overall fraud occurs on Monday. The fewest fraudulent transactions occur on Sunday. The most CP fraud occurs on Saturday -- 42% higher than on Sunday -- and the most CNP fraud occurs on Monday, 92% higher than on Sunday.
Grocery stores and supermarkets at 25% and home supply warehouse stores at 8% are top targets for CP fraud. Top merchant categories for CNP fraud include electronics stores at 11%; discount stores about 10.2%; and computers, peripherals and software (7.8%).
Loc Nguyen, CMO of Feedzai, suggests these five holiday shopping behaviors to alert brands and keep consumers safe:
1. Lock It Up:Consumer Reports found that 34% of us don't lock our devices. This is a major reason why so many people's accounts are hacked when their mobile phone is lost. Most mobile devices have a password or code feature; use it to keep your information secure.
2. Don't Share: Password security is more important than ever. Unfortunately, people tend to share and reuse the same passwords across multiple accounts. Instead, use a unique password for each account and vary your email addresses. Use long passwords with a mix of letters, numbers and symbols. Don't store your account information on unsecured computers, and don't share passwords even with friends and family
3. Watch the Inbox: As retailers continue to pump their holidays sales there is an increased risk for shipping notification and phishing scams. We are all more likely to click on notifications at this time of the year because we think they are legit. (Get in the habit of checking the return email address before clicking on anything.)
4. Behave Normally: New artificially intelligent machine-learning fraud systems developed within the past five years can now tell friend from foe. Fraudsters steal your information, but they don't behave like any specific person. Stay safe by being yourself when making purchases.
5. App Awareness: Download apps from a trusted place like Android, Apple or Amazon Stores. Read the user feedback and make sure the app has good ratings. Read the terms and conditions to make sure it does not access phone information unnecessarily.
Holiday shopping in electronics store photo from Shutterstock