The 2021 Global Fraud Report reveals that, since the start of the pandemic, merchants are experiencing a higher volume—but smaller range—of fraud attacks, with friendly fraud now the #1 fraud attack.1
The 2021 Global Fraud Report is based on a survey, carried out in March and April 2021, with 650 respondents involved in eCommerce fraud management decisions at companies based in Europe, North America, APAC and Latin America.
Among the key findings about fraud attacks experienced since the start of the pandemic, respondents indicate that the volume of fraud attacks has gone up, while the range of attacks has gone down.1
For merchants of all sizes, friendly fraud is now the #1 fraud attack (up from #5 in 2019).2 Friendly fraud occurs when a customer requests a chargeback from their bank despite having received the goods or services they ordered. Globally, 39 percent of merchants indicate they have experienced friendly fraud.2 They estimate that around 1.2 percent of their accepted eCommerce orders are ultimately revealed to be friendly fraud.3
| Fraud type | 2021 rank | 2019 rank | Global % experiencing 2021 |
| Friendly fraud | 1 | 6 | 39 percent |
| Card testing | 2 | 4 | 37 percent |
| Phishing/pharming/whaling | 3 | 1 | 34 percent |
Source: 2021 Global Fraud Report, Cybersource and MRC, 2021, p16
The 2021 Global Fraud Report shows that friendly fraud has become particularly problematic for merchants in North America and APAC, where reported incidence rates rose by 9 percent and 16 percent, respectively, compared to 2019.2
How are merchants dealing with friendly fraud?
To combat the rise in friendly fraud attacks on their organizations over the past two years, merchants have had to refresh their fraud management strategies.
Among survey respondents, 80 percent globally say they have implemented a formal approach for combating friendly fraud.3 In the majority of cases, the formal approach comprises a range of tactics. The three most commonly used are:
- Checking customer purchase and order histories (36 percent of merchants)
- Verifying billing addresses (35 percent)
- Requiring Card Verification Value (CVV) codes (35 percent)3
Further measures include ensuring policies are clear (to help prevent the friendly fraud that may arise when genuine customers struggle to navigate the returns process) and requiring signature on delivery (for additional proof that items have been received).3
Why an effective fraud management strategy matters
As we can see from the 2021 Global Fraud Report, the eCommerce fraud landscape has evolved since the start of the pandemic, and many merchants are adapting their fraud management strategies accordingly. The report shows, for example, that the prevalence of account takeover attacks has declined per merchant since 2019, due in part to merchants' increased implementation of specialist tools to identity and mitigate this type of fraud.4
As well as helping merchants to protect their customers and their business, an effective fraud management strategy can also lead to increased revenues due to fewer false transaction declines, and an improved shopping experience for genuine customers.
Look out for further blogs in the series, each of which will examine other survey results in more depth. To read all the results and insights now, download the 2021 Global Fraud Report.
1 2021 Global Fraud Report, Cybersource and MRC, 2021, p15
2 2021 Global Fraud Report, Cybersource and MRC, 2021, p16
3 2021 Global Fraud Report, Cybersource and MRC, 2021, p17
4 2021 Global Fraud Report, Cybersource and MRC, 2021, p18