Miami, a port city where a lot of international commerce is conducted, is home to both the riskiest billing and shipping ZIP codes when it comes to e-commerce fraud, a new study finds.
At the state level, Delaware, Oregon, and Florida—in that order—were the riskiest based on the ZIP code of the purchaser and the address to which online orders were sent, according to Experian Information Solutions Inc. An Experian spokeswoman did not offer an explanation as to why Delaware had such high rates of e-commerce fraud.
Among major cities, Miami had the highest concentration of fraudulent e-commerce activity, with eight of the top 20 riskiest billing ZIP codes and eight of the top 20 riskiest shipping ZIP codes falling within its city limits, the study finds. Experian has said this is because a of the city’s high volume of international shipping and commerce which potentially allows “criminals to move stolen goods more effectively.” Experian analyzed millions of e-commerce transactions throughout 2016 to come up with its data.
Data from Experian shows that the average e-commerce fraud attack rate for the U.S. increased by 33% in 2016 compared with 2015. Fraud attack rates show the attempted fraudulent e-commerce transactions compared with total e-commerce orders, Experian says. For example, in 2016, the Northeast region of the U.S. had a 44% year-over-year increase (to 17.9 basis points from 12.4) in its shipping fraud attack rate and a 24% year-over-year increase (to 18.0 from 14.5 basis points) in its billing fraud attack rate.
“The adoption of EMV terminals has pressured attackers to migrate their fraud attempts to the card-not-present channel, driving the increase,” Experian says. “And the availability of compromised payment and identity data makes it easier for fraudsters to get their hands on legitimate consumer accounts.”
Knowing where fraud occurs can help e-retailers because such information can be considered when they assess whether an online order is legitimate, according to Experian, which analyzed data on fraud attempts for shipping and billing locations. 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.