With the Holiday shopping rush takes everyone’s schedule busy, on digital space comes hackers and fraudsters lurking at their potential prey.
In its latest study, TransUnion (NYSE: TRU) released findings on the e-commerce fraud trends that occurred during the start of the 2023 holiday shopping season. This period spans from Nov. 23, the Thursday before Black Friday, until Monday, Nov. 27.
Based on proprietary insights from TransUnion’s global device risk consortium, the analysis found that when the consumer was in the Philippines during the transaction within the Black Friday shopping period, 12.8% of e-commerce transactions were suspected to be fraudulent. While this number was 4.4% higher than the same period in 2022, it was alarmingly 19.0% above the rest of 2023 before Nov. 23.
Despite the percentage of suspected e-commerce fraud in 2023 before the holiday shopping season being the lowest in past three years at 10.7%, the rapid uptick during the Black Friday shopping period shows that retailers should remain cautious in detecting and combating fraud to protect themselves and consumers during the busiest business season of the year.
The Percentage of Suspected E-Commerce Fraud During the Black Friday Shopping Period vs. Overall
“Just as the holiday season drives consumers online to begin shopping for gifts for their loved ones, so does it become a destination for fraudsters seeking to take advantage of this time for their financial gain,” said Yogesh Daware, chief commercial officer at TransUnion Philippines. “Online retailers must ensure that consumers shopping their sites for the best deals are at the same time protected from fraud in the most seamless and friction-right way possible.”
The study also revealed the suspected digital fraud rate for each day during the holiday shopping period in the Philippines. Similar to last year, the suspected digital fraud rate was the highest on Black Friday, November 24.
The Suspected Digital Fraud Rate Varies for Each Day of the 2023 Holiday Shopping Weekend
As part of this analysis, TransUnion also determined the top indicators of fraudulent e-commerce transactions during the holiday shopping season globally, including the Philippines. This year, transactions per IP (triggered by an unusual volume of activity from a single Internet Protocol [IP] address to a customer’s site in a short period) and transactions per device (triggered by an unusual volume of activity from a single device to a customer’s site in a short period) were the leading indicators for potential fraud attempts.
“The days leading up to the Christmas holidays mark the biggest shopping season of the year for retailers in the Philippines, but equipping themselves with the proper tools to detect fraud at the first warning sign is a year-round priority. A critical way to minimize fraudulent transactions while at the same time protecting legitimate ones involves implementing holistic fraud solutions that can verify customer identity and authenticity at the very beginning of a transaction, including both account creation and login,” added Daware.
Consumers Express Concern This Holiday Season
The increase of suspected digital fraud during the traditional busiest days of the holiday shopping season occurred as consumers continue to express concern about being victimized during this popular shopping period. TransUnion’s Q4 Consumer Pulse Study found that 93% of Filipinos consumers are extremely, very, or moderately concerned with being victimized by online fraud this holiday season – a slight increase from 92% in 2022.
TransUnion came to its conclusions primarily based on intelligence from its identity and fraud product suite, TransUnion TruValidate™, which helps secure trust across channels and delivers efficient consumer experiences. The rate or percentage of suspected digital fraud attempts reflect interactions which TransUnion customers either denied in real time due to fraudulent indicators or determined to be fraudulent after a manual review process—compared to all transactions it assessed for fraud.