Where people live matters when it comes to e-commerce fraud – the Costa Mesa, Calif.-based Experian recently analyzed data from millions of 2015 e-commerce transactions to identify U.S. attack rates for shipping and billing locations.
Overall, Florida is the riskiest state for billing fraud, followed by Delaware; Washington, D.C.; Oregon and California. Meanwhile, Delaware is the overall riskiest state for shipping fraud, followed by Oregon, Florida, California and Nevada.
With more than 13 million fraud victims in 2015, assessing where fraud occurs is an important layer of verification when performing real-time risk assessments for e-commerce, according to Experian.
Experian considered billing states as those associated with fraud victims (the purchaser's address) and shipping states associated with fraudsters (the receiving address of purchased goods).
Here are some of Experian's top findings:
- Eudora, Kan., had the overall riskiest billing zip code (66025). The next two riskiest zip codes are located in Miami (33178) and Boston (02210).
- South El Monte, Calif., has the overall riskiest shipping zip code (91733). The next four riskiest shipping zip codes are all located in Miami.
- Overall, five of the top 10 riskiest shipping zip codes are located in Miami.
- Defiance, Ohio, is home to the least risky shipping zip code (43512).
The majority of U.S. states are 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.
According to Experian, this indicates 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. 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 ranked among the riskiest cities for both measures of fraud attacks.
Neighboring proximity to higher-risk states does not appear to correlate to any additional risk — Pennsylvania and Rhode Island, for example, ranked as two of the lower-risk states for both shipping and billing fraud. Other lower-risk states include Wyoming, South Dakota and West Virginia.
"Fraud follows the path of least resistance. With more shipping and billing options available to create a better customer experience, criminals attempt to exploit any added convenience," Adam Fingersh, Experian general manager and senior vice president of fraud and identity solutions, said. "E-commerce fraud is not confined to larger cities since fraudsters can ship items anywhere. With the switch to chip enabled credit card transactions, and possible growth of card-not-present fraud, our fraud solutions help online businesses monitor their riskiest locations to prevent losses both in dollars and reputation in the near term."
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Roy Urrico
Roy W. Urrico specializes in articles about financial technology and services for Credit Union Times, as well as ghostwriting, copywriting, and case studies. Also: writer/editor of a semi-annual newsletter for Association for Financial Technology since 1997 and history projects funded by the U.S Interior Department, National Park Service and Warren County (N.Y.).
