February 29, 2024

eCommerce is when you exchange goods or services for cash, done on the internet. It comes with enormous benefits, especially for people who, because of their jobs, rarely have time to visit shops that offer goods or services they might be interested in. It saves one from the hassles of meeting a crowd of other consumers or joining a line queue that, in some extreme cases, could last up to hours.

The convenience of eCommerce has gained so much popularity that about 33.3% of the world’s population buys things online. Unfortunately, this has piqued the interest of fraudsters as an opportunity for their activities to thrive. Let us look at the most essential statistics on eCommerce fraud.

Essential Statistics on eCommerce Fraud

Essential Statistics on eCommerce Fraud

1. The fear of losing credit cards to theft and the information used for eCommerce fraud is experienced by at least 21 percent of online users.

2. 54% of social commerce users admitted to observing suspicious or possible crime-related activities online, ranging from sales made from door to door to fraudulent calls, known as spam calls, and emails on postal services.

3. In 2019, online vendors were subjected to about 206,000 cyber attacks monthly. 

4. As of 2020, 47% of companies that were observed admitted to being victims of online fraudsters for the past two years.

5. After the pandemic, fraud detection and prevention in the global economy was recorded to be $20.9 billion as of 2020, projected to hit the $38.2 billion mark by 2025.

6. Because of heavy traffic experienced from the 15th to 30th day of a month due to online consumers engaging in more transactions within these periods, online vendors were subject to about 75,000 cyberattacks daily.

7. In 2020, the percentage of individuals who fell into the hands of online fraudsters was up to 20%, according to a survey by Marqeta.

8. Following the pandemic, 65% of online users or consumers were anxious about becoming victims of online fraudsters.

9. The age demography of eCommerce fraud victims shows that older folks between the ages of 70 and 80 were the least likely to fall victim, with only about 13% of them recorded. In contrast, younger online users were the more frequent victims, with a percentage of 33%.

10. A projection of $9.6 billion is expected to be paid by companies annually for fraud detection and prevention by 2020.

11. 84% of the money lost to eCommerce frauds came from domestic deals in 2020 but dropped to 71% the following year (2021).

Types of eCommerce Fraud – Thorough Review

Types of eCommerce Fraud

Cyber attacks come in different shapes and forms, which merchants need to be aware of to identify loopholes in online business transactions. Despite the vast genre of cybercrime or eCommerce, they generally come in two major options, namely.

Personal Fraud

12. This is when the potential victim is an individual and makes transactions from personal needs or services. 

Business Fraud

13. As the name implies, the victim in this scenario is mostly business entities or companies, not a single individual.

Types of Personal Fraud

Types of Personal Fraud

Identity Theft

14. According to the Federal Trade Commission, $5.9 billion have been lost to identity theft globally from 2021 to 2023. Identity theft is when an individual has access to the victim’s personal information and uses such to gain entry into the victim’s funds. In some cases, the criminal can use this information to collect loans from banks and other money-lending entities, leaving the victim financially unprepared to deal with outstanding debt they didn’t make use of. Some symptoms of identity theft are missing emails, calls from financial institutions on payment of loans you didn’t embark on, and text messages or emails alerting one of the log-in attempts.

Impersonification Fraud (Phishing)

15. According to a report by Astra, 1.2% of emails sent globally are phishing, with a mind-boggling record of 3.2 billion such cyber attacks on merchants every day. This sort of fraud is when the criminal pretends to be someone of authority or a close friend or family member of the victim. This sort of fraud aims to make the victim comfortable enough to give away sensitive information that could grant the criminal access to the victim’s finances. 

Credit and Debit Card Fraud

16. A survey by the Federal Trade Commission in 2021 revealed 390,000 reported cases of both credit and debit cards in the United States of America alone, becoming one of the most frequently used genres of fraud in the US. Cyber attacks are perpetrated by criminals who access information on a victim’s card and use it to make unauthorized purchases online. In some cases, they go as far as using card readers that look like part of an ATM, which are designed for the sole purpose of pin codes and card numbers of the potential victim. They are called “skimmers,” and details acquired from this can be used to clone the victim’s card. The threat of card fraud is realistically scary when you consider that criminals can buy your information from the dark web for just $14 or less.

Loan Fraud (Mortgage Fraud)

17. According to a Federal Bureau of Investigation (FBI) report, the amount lost in America to mortgage or loan fraud fluctuates between 1 to 10 billion dollars annually. A cyber attack of this category is when the culprit uses the victim’s information to secure unauthorized loans or mortgages without the victim’s consent. That leaves the victim with the sad option of paying for what they didn’t use. In some extreme cases, they could lose their homes or some of their assets or inheritance used as collateral for the loan they were oblivious to.

Fake Cheque Fraud

18. As of 2021, financial entities reported over 350,000 tasks online to have the potential for cheque-related fraud, according to a report by the Financial Crime Enforcement Network. That is the sort of fraud committed by the culprit with the aid of a check with a specific amount of money that cannot be cleared. Only the criminal is aware the cheque cannot be cleared. The culprit hopes the victim doesn’t suspect the cheque and usually withdraws the specified amount before the number of days it will take to clear the cheque.

Cryptocurrency Fraud

19. A report by the Financial Trade Commission(FTC) shows that within six months in 2022, $80 million was lost by individuals to crypto-related fraud. Despite the huge success of cryptocurrencies in today’s world, there is an ever-growing concern about fraud on that platform. This is because of the number of cases that make the news.

Tax Fraud

20. Over a million tax return cases were linked to tax fraud by the Internal Revenue Service in 2023. One of the reasons this sort of fraud thrives is because of the “phishing” concept of fraud that also exists in the crypto market. The culprit pretends to be a trading partner or someone the victim trusts, getting private and sensitive information they will use to access the victim’s e-wallets or accounts.

Ponzi Scheme Fraud

21. The Ponzi scheme or investment fraud is a type that promises potential victims the opportunity to make money through alleged new business enterprise, usually in the form of real estate business where the victim is convinced they are making money when it’s not real. This is because the money received is paid by other investors caught in the web of deception. When the culprits realize a certain decline in funds raised, they close the scheme, taking money invested by the victims who thought they were real investors.

Malware 

22. In 2023, 5,704,599 malware and viruses were blocked, according to Kerpasky security networks. These are destructive programs written to gain access to a device once installed. Just like skimmers, this software will have access to the personal details of the device owner, including usernames and passwords to bank accounts and other financial apps installed on the device. 

Health Care Fraud

23. On average, $68 billion is lost annually to healthcare fraud in America. Health fraud is the type in which the culprit steals the victim’s identity, but instead of just going after the victim’s cash, the criminal uses this information to pay for their medical bills. Many medical documents and data have been taken over, lost, or leaked over time. 

Employment Scams

24. The unemployment rate in the world is projected to reach 5.8% in 2023, with 208 million people seeking jobs. This proves that the average unemployed person will be desperate to get a job. Fraudsters have seen potential in this demography and have exploited unemployed folks either with a fake job offer that requires the would-be victim to give away certain sensitive personal information that will be used to gain access to their bank details or ask them to pay a certain fee to secure the job which could come in the form of fake training fees

Advance Fee Fraud 

25. From 2020, about 60,000 advanced fee scams were reported, increasing to 454,000t cases towards the end of 2022. This fraud system is when the victim must pay some money before the goods or services are delivered. When the victim makes a payment, the culprit disappears, never to be seen or heard from again without access to the goods or services paid for.

Types of Business Fraud

Types of Business Fraud

Business Tax Fraud

26. An estimated $190 billion is lost in America annually. This sort of fraud is when an individual or a business entity submits false entries like false income rates or expenses with the sole aim of not being taxed at the proper rate by the government. Because there are legal ways to reduce payment of tax rates, this method is considered fraud because of the manipulation and falsehood involved.

 Insider Fraud

27. As of 2022, insider threat has worsened, with an increase of 44% from 2020 to 2022. Fraud of this nature is perpetuated by people who work in an establishment or company. Because of the nature of their job, they have access to certain information they could use to loot funds from either the establishment or clients linked to the business entity. 

Financial Statement Fraud

28. An average of $1 million is lost to financial statement fraud annually, making it the most expensive occupational crime in the world. This is the type of fraud where companies give false financial statements that are usually bloated to attract unsuspecting potential investors to become stakeholders in the business.

Payroll Fraud

29. 46% of business establishments revealed they were victims of payroll fraud from 2021 to 2023. Payroll fraud is the category of fraud where the culprit makes false claims about work productivity or takes credit for someone else’s job to get an increased salary and, in some cases, creates profiles of people who don’t exist and collects wages from the said profiles. These fake profiles are known as ghost workers.

Propriety Data and Intellectual Property Fraud  

30. Credential theft has cost companies an average sum of $2.79 million from 2020 to $4.6 million in 2022, increasing by 65%. A lot of businesses deal with sensitive pieces of information and data. When that has been compromised and used to the detriment of the business entity, it is known as propriety and intellectual property fraud, with many companies losing to this type. Sometimes, resigning employees could leave with such information and sell it to rival companies.

Workers Compensation Fraud 

31. According to a Coalition Against Fraud Insurance report, $80 billion is lost to insurance scams. Such fraudulent activities are perpetuated by employees who seek compensation from the company by giving false testimonies on tasks done or faking injury or sickness to make the company compensate them financially. At the same time, they could be busy with a job elsewhere. 

Invoice and Accounting Scam 

32. Technically speaking, this scam is perpetrated by insiders who use invoices with false information on foods or services bought. The company will be made to pay for something that will never arrive. The employee takes the money for themselves. At other times, an employee can make personal expenses and report them as company expenses.

eCommerce Fraud Statistics (By Country)

Statistics (By Country)

Despite the increasing threat of cyberattacks on eCommerce, merchants or vendors continue to sell their goods and services online because of the huge benefits of doing business online. It provides access to reach more prospective consumers from their target audience, which translates to a better profit margin for them. Some countries have been hit more than others because of the prevalence of eCommerce in those countries. Let’s look at some countries hit the most by eCommerce fraud.

Indonesia 

33. 35% of online transactions have been reported to be fraudulent, which means more than a third of eCommerce transactions in the country are cyberattacks. Indonesia alone experienced almost 12 million cyberattacks in 2022. This was worse than the previous year (2021), which was 22% less, according to internet security company Kerpasky. In 2021, more than 1.6 million suspicious traffic was observed in Indonesia, according to the Indonesia Cyber and Crypto Agency(BSSN).

Romania 

34. According to an Israeli security company survey, Forter, Romania has 10% of eCommerce fraudulent transactions worldwide. About 12.3 million Romanian Leu were lost to cybercrime in 2021. Many vendors and merchants have refused to do online transactions in Romania because of the cybercrime rate in the country, despite their high internet speed, which was ranked the 3rd highest globally according to Ookla.

Venezuela 

35. Venezuela has the world’s second most dangerous IP addresses, bested by China only. The cybercrime in this country is so bad that a third of its transactions are fraudulent, with an estimated 33% fraudulent transactions. Generally speaking, cybercrime in the southern part of America is greatly more than the average rate globally!

Mexico 

36. The cybercrime in this country is unique. According to bank reports, an estimated $480 million was lost to eCommerce, with 48% of it among the credit card genre of cybercrime. The reluctance of the Mexican government to fight eCommerce fraud has not helped matters at all, leaving the citizens yearning for better-secured internet transactions.

Brazil 

37. Mexico and Brazil have some of the worst cybercrime rates in the world, with over BRL 70 billion lost to cybercrime in Brazil. The rate of online fraudulent activities in the country is so high that about three to six eCommerce scams occur every minute.

South Africa 

38. In contrast, the cybercrime rate in South Africa is ten times worse than the median global rate. The fraudulent eCommerce atmosphere in the country is so terrible that about 63% of the indigenous population deliberately stays away from online transactions, preferring to trade offline.

China 

39. The last on the list, but certainly not the least. China leads the way in cybercrime, with an estimated 25% of all cybercrime attacks in the world coming from China. There was a massive increase in the online crime rate in China, with a mind-boggling 298% increment from 2017 to 2018, with more than 500,000 online fraudulent attacks recorded in Japan, which were linked to China. The fraudulent nature of the online climate in China has left most of the world wary of the country itself. It’s so terrible the average outsider does not say “the cybercrime in China.” The preferred choice of words is “Chinese government is cyber fraudulent.”

Detection and prevention

As cyber criminals find innovative ways to get the better of innocent online users, finding innovative ways to combat these worrying trends has become paramount. Here is a list of some tools used to find eCommerce fraud.

Digital Forensic Software

40. Examples of this sort of software include Autopsy, Encase, and FTK. They are mostly used to get back files lost from deletion and thoroughly scrutinize network and metadata digital footprints.

Social Media Analysis Tools

41. Tools like this are designed to monitor suspicious users on social media platforms, secretly gathering information about them to ascertain their motives. Tools like Mention, Hootsuite, and Followwonk are software used for this purpose.

Password Recovery Tools

42. As the name implies, they are tools to recover passwords from sources that leave digital footprints, such as encrypted sources or files where digital evidence can be obtained to capture cybercriminals.

Malware Analysis Tools

43. These tools are designed with a directive to scrutinize malware to decipher behavior patterns and where it came from. Such information is used to create anti-malware software or what we call “Antivirus” used to identify and eliminate malware when spotted. One of the leading online security outfits that use these is Kaspersky.

Final thoughts

The threat of eCommerce fraud, or what is known as cybercrime, is serious in the world. It becomes paramount that you know the necessary statistics to equip yourself on how to maneuver the tricky roads of cyberspace and the tools required to arm yourself with to protect your finances, identity, assets, and privacy so as not to be a statistic in the number of global cyber victims.

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