When it comes to e-commerce, Florida is the riskiest state for billing fraud, followed by Delaware, Washington, D.C., Oregon and California, according to an Experian study that analyzed millions of e-commerce transactions.
The study also found that Delaware is the riskiest state for shipping fraud, followed by Oregon, Florida, California and Nevada.
Neighboring proximity to higher-risk states does not appear to correlate to any additional risk — Pennsylvania and Rhode Island are ranked in the report as two of the lower-risk states for both shipping and billing fraud; other lower-risk states include Wyoming, South Dakota and West Virginia.
“E-commerce fraud is not confined to larger cities since fraudsters can ship items anywhere and e-commerce fraud can happen anywhere,” Adam Fingersh, Experian’s general manager and senior vice president of fraud and identity solutions, told eWEEK. “Another surprising finding was that there did not appear to be any relation between neighboring states to states that had high fraud attack rates.”
The majority of U.S. states were at or below the average attack rate threshold for both shipping and billing fraud, with only seven states — Florida, Oregon, Delaware, California, New York, Georgia and Nevada — and Puerto Rico ranking higher than average.
These results would seem to indicate that attackers are targeting consumers equally in the higher-risk states while leveraging addresses from both higher- and lower-risk states to ship and receive fraudulent merchandise.
“Businesses need to understand the value of employing a multilayered approach to fraud prevention, especially when it comes to authenticating consumers to validate transactions,” Fingersh said. “By looking at all the points of the customer journey, businesses can better protect themselves from fraud, while maintaining a positive consumer experience.”
Many of the higher-risk states are located near a large port-of-entry city, including Miami; Portland, Ore.; and Washington, D.C., perhaps allowing criminals to move stolen goods more effectively. All three cities are ranked among the riskiest cities for both measures of fraud attacks.
Eudora, Kan., has the overall riskiest billing ZIP code (66025), with the next two riskiest ZIP codes located in Miami (33178) and Boston (02210).
South El Monte, Calif., had the overall riskiest shipping ZIP code (91733), with the next four riskiest shipping ZIP codes all located in Miami.
Overall, five of the top 10 riskiest shipping ZIP codes are located in Miami, while Defiance, Ohio, had the least risky shipping ZIP code (43512).
“Fraud follows the path of least resistance and with the switch to chip-enabled credit card transactions, and possible growth of card-not-present fraud, businesses need to anticipate a steady increase of e-commerce fraud,” Fingersh said. “Having the right fraud solution in place can help online businesses prevent losses both in dollars and reputation.”