Eudora, Kan., isn’t just home to 6,378 people. It is also home to both the two riskiest shipping ZIP codes through the first six months of 2016, according to a new Experian report.
Nationwide, e-commerce fraud increased 15% compared with the same time last year, Experian says. Three states in particular—California, Florida and New York—are magnets for both shipping and billing fraud, with those three states accounting for 52% of all e-commerce shipping fraud and 44% of all e-commerce billing fraud.
Shipping states are associated with criminals committing fraud (the address where purchased goods are sent), and billing states are associated with fraud victims (the address of the purchaser), Experian says.
E-retailers that know where fraud occurs can add a layer of verification when assessing the risk of whether an online order is legitimate, according to Experian, which analyzed millions of e-commerce transactions to calculate attack rates using “bad transactions” in relation to the total number of transactions for the first half of the year.
Eudora appears to be the actions of a small ring of bad actors, an Experian spokesman says. “The city as a whole, if you exclude one or two addresses, is fairly normal. It could be a ring that is not based in Eudora but they’re using that address to ship to and [packages] then go somewhere else.”
Eudora isn’t the only town in Kansas on the e-commerce fraud map for shipping and billing fraud. A Potwin, Kan. couple, James and Theresa Arnold, in August filed a lawsuit in U.S. District Court in Kansas against an internet protocol (IP) mapping vendor, MaxMind, alleging that the company’s mapping practices resulted in their rural Kansas address being recorded as the default location for IP addresses when it was unable to pinpoint the IP address of a user, according to the lawsuit. This means that for the past 15 years, every time Maxmind’s IP geolocation software is unable to locate an internet user’s precise geographical location, it automatically defaults to the front yard of the Arnolds’ home in Potwin.
The Washington Post wrote a story about the Arnolds situation detailing the harassment they have received from upset people all over the world who thought the Arnolds were responsible for various wrongs, including overloading business email servers or online fraud.
Maxmind has filed motions to dismiss the case, but no action has been taken in court. A Maxmind spokesman declined to comment.
Experian was aware of the Arnolds’ situation before releasing its report on shipping and billing fraud hot spots, the company’s spokesman says. “Eudora is being flagged [by Experian] based on its use as a billing/shipping address, not a resolved IP city location based on the geographic center of the U.S. So while it may seem odd that a small town in Kansas is ranking so high, situations like this usually indicate a ring of fraudsters submitting fraudulent transactions from a shared billing address and shipping to several other addresses,” he says. “In many cases the final address is a port or airport location that acts as a re-shipper or freight forwarder in some e-commerce fraud scenarios.”
While Eudora ranks first and second in shipping and billing fraud, Miami appears to be far riskier than the entire state of Kansas. Experian’s data shows that Miami is home to six of the 15 riskiest shipping ZIP codes and four of the top 10 riskiest billing ZIP codes.
According to Experian, the top 10 riskiest billing ZIP codes in the U.S. are:
- Houston, 77036
- Eudora, Kan., 66025
- Miami, 33192
- Miami, 33166
- Homer, Alaska, 99603
- Miami, 33195
- Winchester, Ill., 62694
- Central Lake, Mich., 49622
- Miami, 33136
- Harrington, Del., 19952
The top 10 riskiest shipping ZIP codes are:
- Eudora, Kan., 66025
- Miami, 33195
- Miami, 33192
- Miami, 33166
- Nettleton, Miss., 38858
- Winchester, Ill., 62694
- South El Monte, Calif., 91733
- Central Lake, Mich., 49622
- Elizabeth, N.J., 07201
- Houston, 77036