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Russia gets a bad rap because of its notorious hackers, but more U.S. e-commerce fraud originates from China and Venezuela than Russia, according to a new report from Experian plc.
Experian, which is based in Dublin, Ireland, but has large U.S. businesses in credit reports and marketing and data services, says it analyzed millions of its clients’ e-commerce transactions from 2017 and 2016 to track attempted fraud compared against all orders. Without giving exact numbers, Experian says in a recently released report that online shopping fraud attacks increased 30% last year over 2016.
Transactions originating from a foreign Internet Protocol address were seven times riskier than the average e-commerce transaction, according to Experian. “China was the riskiest country based on IP [Internet Protocol] address in 2017,” the report says. Next was Venezuela. IP addresses identify desktop computers, laptops, mobile phones and other digital devices.
The report gives particular attention to shipping and billing addresses associated with online fraud. So-called shipping fraud focuses on the addresses to which fraudulently purchased goods are sent. Billing fraud occurs when the address of a victim of a data breach or other identity-related fraud is used as the origin of e-commerce fraud.
The study found that among the top 10 riskiest ZIP codes for online fraud, the 97079 code in Beaverton, Ore., a suburb of Portland, ranked first, with high risk for both shipping and billing fraud involving orders from devices with Chinese IP addresses. Three other top 10 ZIP codes were in Portland and were associated with fraudulent shipping or billing linked to China, Taiwan, Singapore, or South Korea.
Four ZIP codes in Miami made it into the top 10, and all involved high-risk shipping and billing IP addresses in Venezuela. “Venezuela is nearly 30 times riskier than the population average would otherwise suggest,” the report says.
Besides China and Venezuela, attack rates from Iran, Syria, and Sudan “far exceeded the average for other countries with similar populations and volume of transactions,” according to the report.
Meanwhile, the analysis found that Delaware and Oregon were the riskiest states for both billing and shipping fraud for the second year in a row. Both states saw a significant increase in shipping attack rates in 2017, with Delaware increasing over 300% and Oregon just under 300%.
“Delaware and Oregon are both natural high-risk areas for fraud because they have cities near large ports and international airports,” the report says. “This combination makes an ideal location for the reshipping of fraudulent merchandise, enabling criminals to move stolen goods more effectively.”
