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Which countries have high e-commerce fraud rates?

October 30, 2013 CK Wong Category : , , , , ,


Sift Science, a fraud fighter service provider, has compiled a list of top 25 most fraudulent countries based on its sampling of online transaction data.

You can grab a quick look at the world map below, in which darker red means, well red alert.

Visualization by Sift Science

So here it is, the top 25 most fraudulent countries (read: reported IP address as the country of origin) in the world. Guess what? There are 4 Southeast Asia countries listed led by Malaysia at 7th, Philippines at 10th, Indonesia at 14th and followed by Singapore at 16th.

  1. Latvia
  2. Egypt
  3. United States
  4. Mexico
  5. Ukraine
  6. Hungary
  7. Malaysia
  8. Colombia
  9. Romania
10. Philippines
11. Greece
12. Brazil
13. China
14. Indonesia
15. Russia
16. Singapore
17. Nigeria
18. Canada
19. Portugal
20. Switzerland
21. United Kingdom
22. India
23. Netherlands
24. France
25. Austria


What are the general behavior of fraudsters?


It is surprisingly easy to acquire stolen credit cards so how do we identify the behavior of e-commerce fraudsters?

Sift Science provides 5 fun fraud facts (well, fraud is not really fun you know) to detect fraud signals as below:

Fraudsters have stacks on stacks of cards. If the customer has multiple credit cards on file from different banks, their order is 7x more likely fraudulent.

Fraudsters dislike capital letters. if a customer wrote their billing name in all lowercase letters, the order is 2.7x more suspicious.

Fraudsters stay (virtually) on the move. A buyer with multiple billing zip codes within a week is 30x more likely to be fraudulent.

Fraudsters favor disposable email addresses. An email address with two or more digits is twice as likely to be fraud than one with zero or one digit.

Fraudsters are night owls. Transactions at 2AM are 50% more likely fraudulent, while 4AM transactions are 100% more likely fraudulent.


How to prevent e-commerce credit card frauds?


E-commerce theft in action

As an online merchant, you wouldn't want to imagine getting a fraud order in which you will lose the (expensive) item that you ship out without getting payment, not to mention getting a chargeback fee.

Besides the characteristics mentioned above, we would like to share 7 layman, not-so-technical, easy to understand tips on how to minimize the risk of credit card frauds for online merchants.

  1. If you are just going to start selling online, choose a webstore that provides fraud alert system. As for online marketplaces, the established ones usually have pretty good fraud prevention measures in place.
  2. Engage with the right payment gateway or processor, work with them on negative list, maximum transaction allowed per order etc. especially if your volume (and risk) is getting higher.
  3. Liaise with your payment gateway to accept only 3-D Secure (a.k.a One Time Password) enabled credit card. You might also want to block foreign cards with potential high risk.
  4. Always be extra cautious on big ticker orders, especially if the billing and shipping name / address is different. Call customers to verify when you are in doubt.
  5. For big ticket orders, pay attention on the shipping address whether it is a public area like restaurant where fraudsters are not attached to, just bear in mind that their fraud skills is always evolving.
  6. Make sure the delivery service you engage with (or if you are shipping it on your own) verify the customer's identification card and get the delivery order signed by the customer.
  7. In most cases, it is your staff rather than you who fulfill the orders so you need to educate your staff on all the measures above to minimize the fraud risk.

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