Experian analyzed millions of online transactions and found that online shopping fraud grew 30% in 2017, making it another record year for nefarious transactions.

A new study finds that 2017 was another record year for e-commerce fraud. In fact, as e-commerce grows, e-commerce fraud is growing even faster.

According to data released by information services company Experian, e-commerce fraud attacks in the United States were up more than 30% in 2017, compared with 2016. That’s nearly twice as fast as the growth rate of e-commerce sales by consumers in 2017. According to Internet Retailer data, consumers spent $453.46 billion on the web for retail purchases in 2017, a 16.0% increase compared with $390.99 billion in 2016.

Experian, which analyzed millions of online transactions, found that online shopping fraud rose dramatically last year in two categories:

  • Shipping fraud, which occurs when a criminal uses his own address for the delivery of stolen goods purchased online. Rates of shipping fraud increased 37% in 2017 vs. 2016. From a regional perspective, the Western U.S. saw a nearly 60% increase in attack rates for shipping fraud.
  • Billing fraud is an attack in which a victim’s address is tied to the payment account used to purchase the stolen goods. Those rates increased 34%. The North Central region saw a 50% increase in attack rates for billing fraud.

The report, which lists the 100 riskiest ZIP codes for both shipping and billing fraud, found Beaverton, Oregon’s 97079 ZIP code had the highest shipping-attack rates in the U.S. last year. That ZIP code’s shipping- and billing-attack rates were the highest from an Internet Protocol (IP) address in China. That atack rate makes the 97079 ZIP code 1.42-times riskier than the next-riskiest shipping ZIP code (33122, Miami), according to Experian.

Portland, Oregon’s 97252 ZIP code had the highest rate of billing attacks in 2017. Most of its attacks came from Chine. Also notable was the 33198 Miami ZIP code—which was in the top 10 for both billing and shipping fraud in 2017—46.2% of the attack rate was attributable to a Venezuelan IP address, according to Experian.


Fraud attack rates are the number of attempted fraudulent e-commerce transactions against the population of overall e-commerce orders. The figures associated with the rates are basis points; 1 basis point equals an attack rate of 0.01%.

“Typically, the highest-risk areas for fraud are in ZIP codes and cities near large ports of entry or airports. These are ideal locations to reship fraudulent merchandise, enabling criminals to move stolen goods more effectively,” says Aaron Task, vice president and editor-in-chief of Experian Consumer Services. “The widespread availability of stolen data helps explain why we don’t see billing fraud concentrated in just one region of the country. In fact, the top five states for billing fraud make up only about 18% of overall fraud attacks.”

The five riskiest states for e-commerce shipping fraud were Delaware, Oregon, Florida, New York and California. Nearly half of all shipping fraud attacks happened in these states, Experian found. The five safest states for billing fraud were Nebraska, Wyoming, South Dakota, Connecticut and Wisconsin, according to the report.

Task says preventing fraud attacks starts with having a good understanding of how and where fraud is perpetrated. “Then, implement proactive strategies to detect and prevent attacks, as well as protect payment information,” Task says.

Task says good practices include using multi-layered strategies for authenticating consumers and validating transactions. “Look at all the points of the customer experience to better protect them from fraud while maintaining a positive experience,” Task says.


Other findings of the Experian report include:

  • Miami has five of the top-10 riskiest ZIP billing codes and 11 of the top 100.
  • IP addresses from Venezuela would have been the riskiest from a non-U.S. country, but Venezuela has a 60% lower volume of online transactions compared to China, resulting in a higher number of fraud cases.
  • The five riskiest cities for billing fraud were South El Monte, California; New Philadelphia, Pennsylvania; East Walpole, Massachusetts; Carnegie, Oklahoma; and Fort Benning, Georgia.
  • The five riskiest cities for shipping fraud were South El Monte, California.; Minden, Nevada; Hillsboro, Oregon; Westminster, California; and Port Reading, New Jersey.
  • Washington, D.C., fraud attack rates doubled year over year in 2017.