5 Fraud Facts From 2016

Scott StoneFraud Prevention2 Comments

5 Fraud Facts from 2016

We learned a lot in 2016. But, like most of you, we’re happy to welcome the new year and all it’s possibilities. Our teams’ goal remains to produce the most helpful content available to reduce your overall fraud losses. While we created more content than ever last year, we already have big plans for more in 2017.

In order to meet 2017 with a comprehensive approach to fraud management, we must first understand the landscape today. Whether startling, daunting, surprising, or exciting—here are 5 facts to fuel your 2017 end-to-end fraud management.

Global Retail Sales

Global Retail Sales Reached $22.049 Trillion

Retail sales certainly didn’t feel the wrath of 2016. Not only did global retail sales reach $22.049 trillion, ecommerce sales reached $1.915 trillion. Furthermore, total worldwide retail sales will grow 6% from the previous year. eMarketer predicts that worldwide ecommerce sales will surpass $4 trillion by 2020.


CNP Fraud Loss Rate

The CNP Fraud Loss Rate is over 1100% higher than CP

The disparity between card present (CP) and card not present (CNP) fraud losses is alarming. According to the Federal Reserve Bank of Kansas City, the CNP fraud loss rate is 38 bps in value. The CP fraud rate is just 3 bps in value. Addressing CNP fraud should be an urgent matter for merchants, issuers, acquirers, and policymakers alike.


False Positives

US Issuers Declined $264 Million Valid Transactions

False positives are rapidly gaining attention from retailers because of the astronomical losses they’re creating. The revenue lost to false positives is projected to rise by 25%, reaching $331 million, in the next two years. But your company doesn’t have to surrender revenue and alienate customers. Through loosening fraud filters while enabling fraud alerts and automated chargeback responses, merchants can decrease false positives and increase revenue.


EMV adoption

50% of US Merchants are EMV-Ready

The EMV migration has certainly been a struggle in 2016. From lawsuits to policy changes, merchants and card networks have been through it all. But, the payoff is very real for merchants who’ve made the upgrade to EMV-ready terminals. According to TSYS, Merchants with EMV POS systems have already seen a 35% drop in counterfeit fraud.


Recoverable Fraud Losses

71% of Total Fraud Losses are Recoverable

71% of total fraud losses are the result of chargeback fraud and friendly fraud. True fraud, the type of fraud that’s addressed with front-end prevention solutions and irrecoverable from a revenue standpoint, only accounts for 29% of your total losses to fraud. The good news? This means that nearly three quarters of fraud losses are recoverable.


We hope these facts from the last year help in your current 2017 fraud management planning. If you have questions about your company’s end-to-end approach to fraud, we’re here to help you make 2017 the year of recovered revenue and unencumbered growth!

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