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How to recognize an online fraudster

Jen A. Miller | Nov. 12, 2015
The capability to profile potential cybercriminals, along with the implementation of chip-and-pin credit cards, may produce a reduction in the amount of money lost to online fraud each year. But that doesn’t mean the threat will go away entirely.

Alaska, he says, could be high on the list simply because, with drop-down menus used to fill out billing information, Alaska is typically listed first. 

What to do next

Tan says that this information can be useful, but that "these are disparate series piece together in one report. If you as an ecommerce business are looking for people who are 90-years-old, who are purchasing at 3 a.m., who are purchasing for less than $20, you're likely going to miss other fraud that's happening outside of those parameters." 

But knowing who to flag and not will become more important given the U.S. shift to EMV credit cards, which are designed to stop card-present fraud. 

"The U.S. is the last big market to make the switch over to EMV," says Gilles Ubaghs, senior analyst of financial services technology at Ovum. "What we've seen in every single other market is other forms of fraud increased." 

According to the Federal Reserve, card-present fraud reached $2.4 billion in 2014. Ovum predicts that if the U.S. achieves a theoretical 100 percent implementation of EMV, that card-present fraud would drop to $1.75 billion a year by 2020. However, because of this shift, Ovum estimates that in the U.S., card-not-present fraud could reach $2.6 billion by 2020. 

Ubaghs adds there's also the possibility for more "traditional" forms of fraud, like muggings and pick-pocketing. ATMs won't be completely safe, either. Criminals can wedge paper into the card slot so that it gets stuck, wait for the user to leave for help, then use pliers to take out the card. How do they get the PIN number? With a tiny, almost invisible camera.

Ubaghs adds that consumers might let down their own guard, too, thinking that having a chip on their credit card guarantees absolutely security. "We think great, that was a big changeover, I can relax now," he said. 

That's not going to be the case – to which I can attest. My new chip-enabled credit card was used by a fraudster less than a week after I activated the card. I wasn't surprised. It's the new normal.


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