Dive Brief:

  • In a consumer warning ahead of the year-end holiday shopping season, card giant Visa told consumers in a Thursday press release to beware of new schemes that seek to lure them into scams.
  • The techniques online will include phishing emails without the telltale spelling errors that gave them away in the past and in the physical world they will include ATM and checkout card readers corrupted by deeper-inset skimming devices, Visa said in the release.
  • Last year, such frauds increased 11% during the year-end holiday season, between November and January, compared to the non-holiday period and rose 8% over the period in 2021, according to Visa, the biggest U.S. card network company.

Dive Insight:

Payments fraud has surged in recent years, partly because of increased e-commerce activity online triggered by the COVID-19 pandemic. 

The amount of money American consumers reported losing to fraud last year jumped 30% to $8.8 billion compared to 2021, the Federal Trade Commission said in February, and much of that fraud flowed through some part of the payment system. Frauds perpetrated in the context of “shopping” were among the top five most prevalent types of fraud, the agency said.

While Visa predicted that some fraud would still happen in old-fashioned ways, like criminals stealing cards and smartphones, the card network focused on digital crimes in detailing what consumers should be on guard against during this shopping season.

The digital form of skimmers placed on online checkout pages have also become more sophisticated, with hackers seeking to steal card account numbers, CVV security verification codes, expiration dates and personal data from authentic merchant web pages, Visa said. In addition, criminals are increasingly setting up fake merchant websites that more authentically mimic real shopping pages, without the spelling and grammar errors that made them easy to spot in the past.

Criminals are also using artificial intelligence to their benefit, rigging their fake sites with better search engine optimization so they appear higher in online search results. 

Merchants will also be targeted online, with ‘bots’ created by cybercriminals who buy up items in bulk and resell them at higher prices or use their AI searches to find mismarked items that can be purchased and resold.

“Crooks prepare all year for the holiday shopping season, taking advantage of increased activity and consumers who let their guard down searching for the perfect gift,” said Visa Chief Risk Officer Paul Fabara.

Some of Visa’s tips for guarding against the scams are well-known: Don’t click on emails from strangers and be sure to keep software updated. Other techniques include looking for the ‘s’ in the ‘https’ portion of online web addresses, representing that the site is ‘secure;’ using tokenization to make purchases; and checking shipping details closely for shipments being routed to an incorrect address.

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