Suspected fraudulent online transactions rose during Thanksgiving holiday

THE NUMBER of e-commerce transactions in the Philippines suspected to be fraudulent rose by 19% during the holiday shopping season.

At least 12.8% of e-commerce transactions in the country were suspected to be fraudulent during the Black Friday or Thanksgiving holiday period in the United States from Nov. 23 to 27, a study by TransUnion Philippines found.

This was higher than the 10.7% suspected fraudulent transactions seen during the rest of the year.

It was also higher than the 12.2% recorded in the same holiday period last year but lower than the 17.2% seen in 2021.

Black Friday is the day after Thanksgiving in the US. It has become a big retail event globally and is seen as the start of the holiday shopping season.

“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,” TransUnion Philippines Chief Commercial Officer Yogesh Daware said.

“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,” he added.

The report showed that highest digital fraud rate in the Philippines during this holiday period was recorded on Nov. 24 or Black Friday itself at 14.7% of transactions, followed by Nov. 23 or Thanksgiving Day at 13%. Meanwhile, Nov. 27 or Cyber Monday saw the third highest digital fraud rate at 12.5% of transactions, followed by Nov. 25 at 11.7% and Nov. 26 at 11.3%.

The strongest indicator of a fraudulent transaction was a high volume of activity coming from a single Internet Protocol address to a customer’s site during a short period, TransUnion said.

An “unusual” volume of activity from a single device to a customer’s site in a short period was also a top indicator of a possible fraud attempt.

“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,” Mr. Daware said.

“ 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,” he added.

TransUnion Philippines’ Consumer Pulse Survey for the fourth quarter also found that 93% of Filipinos are extremely, very or moderately concerned about being victimized by online fraud during the holidays.

The Philippines recorded the highest percentage of consumers worried about fraud among the countries studied. It was followed by India at 88% and South Africa at 84%.

The survey was conducted from Sept. 25 to Oct. 18 among 13,706 adults living in the Philippines, Brazil, Canada, Chile, Colombia, the Dominican Republic, Guatemala, Hong Kong, India, South Africa, Spain, the United Kingdom, and the US. — AMC