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The Resource Center Identity Theft & Protection The Resource Center | article

New Study Finds Who Is Most Likely To Commit Fraud

A new study of national data finds who is most likely to commit fraud, where it'll happen and at what time.If you own an ecommerce site, you should be wary of a male buyer who is 85 and from Alaska or Delware, according to a new report from Sift Science, a tech company that operates a fraud protection and detection tool for e-businesses. The report, called “The United States of Fraud,” found who commits fraud most often, where it’s most likely to happen and how it’s done. The report used a year’s worth of data from August 2014 to 2015 collected by Sift Science to provide more useful information to understand the indicators of online fraud.

To collect this data, Sift Science looked at a sample of 1.3 million transactions with shipping or billing addresses in the U.S. The company then cross-referenced these transactions with third-party data from FullContact, a contact management software manufacturer, to gather details such as gender and age. With this data, they were able to compute “the fraud rate as the number of fraud users as a fraction of all users.”

With these numbers, Sift Science was able to determine which age groups and locations contributed the most to the number of online fraud cases. This can help ecommerce site owners detect suspicious activity. Using the information collected by Sift Science, here are some ways you can identify such activity on your site:

  • Does the user have multiple identities? A user with two to four accounts linked to it, it is eight times more likely to be fraudulent. When the user has between 4 and eight accounts, that likelihood increases to 14 percent.
  • Was the purchase made at a late hour? According to Sift Science, 3 a.m. is the “fraudiest time of day,” regardless of time zones. It also added that these fraudulent transactions are more common on weekdays.
  • Is the user over 80 years old? The report found that users identifying themselves as 85-90 in age are 2.5 times more likely to commit fraud than the average user. The report mentions that users could be lying about their age.
  • Is the user billing to Alaska? Or shipping to Delaware? Alaska currently ranks as the state with the highest rate of fraud for billing addresses. Sift Science also found that Delaware ranks the highest for fraud based on shipping address.
  • Is the item cheap? Users who order something that is worth $20 or less are 2.16 times more likely to be a fraudster.
  • Is the user a “short-timer”? The report found that phony users typically open an account specifically for a crime, so be wary of accounts less than three days old, because they are three times more likely to be fraudulent.

While there’s a lot of convenience to ecommerce, it can also open a lot of vulnerabilities to online security issues. To take action that can help protect yourself from identity theft, you can invest in a credit monitoring service that can alert you of any activity that may indicate fraud.