The nation’s retailers are seeing fraud take a significantly bigger bite out of their profits, thanks to a spate of data breaches at major merchants. Retailers lost, on average, 0.68 percent of their revenue to fraud in 2014, as compared to 0.51 percent in 2013, according to the new True Cost of Fraud study by LexisNexis Risk Solutions. “Fraud has been going up the last few years, but this was a really big jump – both in the amount of revenue lost to fraud and the shear number of fraud attempts,” said Aaron Press, a fraud expert at LexisNexis Risk Solutions. The average merchant suffered 133 successful fraudulent transactions per month, up 46 percent from last year. Fraud normally gets passed on to consumers in the form of higher prices.
LexisNexis says the spike in fraud is being driven by the massive number of credit and debit card numbers compromised in recent data breaches, as well as the growth in mobile shopping. The study found that the security protocols designed to stop eCommerce fraud aren’t always as effective with mobile transactions.
IN-DEPTH
-- Herb Weisbaum