Visa research showcases emerging fraud schemes in retail and ecommerce

This research reveals a significant rise of phishing schemes proliferated through generative AI tools, and a marked increase in enumeration and ransomware. The report also shows how Visa is working with law enforcement around the globe to bring perpetrators of fraud to justice.

While the global fraud rate trended lower than normal expected fraud levels during the report’s time period (January – June 2023), Visa shared that it helped to proactively block USD 30 billion in those time periods. However, threat actors were successful in conducting targeted and sophisticated fraud schemes impacting specific institutions, technology, and processes.

Highlights of the report’s findings

In March 2023, there was a significant surge in ransomware attacks, marking a record-breaking month with nearly 460 incidents. This represents a 91% increase compared to February 2023 and a 62% rise compared to March 2022. A ransomware report for 2023 revealed that the most common cause of these attacks was exploited vulnerabilities (36%), followed by compromised credentials (29%). Interestingly, ransomware attacks do not always focus solely on payment data but may compromise any accessible data, including payment information and personal identifiable data.

Enumeration attacks are on the rise, with a 40% increase in incidents during the study period. Visa effectively used its Account Attack Intelligence to detect and alert merchants about these attacks in real time, preventing fraud. Online merchants, specifically Card-Not-Present (CNP) merchants, were the primary targets, accounting for 58% of fraud and breach investigations. Brick-and-mortar merchants made up 20% of incidents, while ransomware and fraud schemes constituted 7% of the total.

Online scams have evolved with new tactics during January – June 2023:

• False merchants: Scammers create counterfeit merchant websites resembling trusted brands to trick consumers into making orders. However, these sites neither deliver the ordered goods/services nor fulfil their payment, leading to stolen payment information;

• Malvertising: Some fraudsters use fake ads to collect personal information. They target victims with search engine-optimised scams based on the victims' legitimate interests;

• Flash-fraud scams: Threat actors establish seemingly legitimate merchants, processing a few genuine payments to gain credibility. Once trust is built, they execute a large number of fraudulent transactions using stolen payment data and disappear after obtaining the funds;

• Free gift scams: An emerging crypto scam in the retail space is the 'free gift' scam, where bad actors offer a ‘free gift’ through a pop-up window asking the victim to confirm the transaction. When clicked, the malicious payload is executed, which includes a file with malicious NFT, allowing fraudsters to communicate with the victim’s wallet and authorise cryptocurrency transfers from the victim’s wallet to the fraudster’s.

Visa's Proactive Measures in Safeguarding Consumers

Visa has been actively working to protect consumers from an increasingly complex threat landscape. Their Visa Payment Fraud Disruption efforts, in collaboration with law enforcement and government agencies, have resulted in significant crackdowns on cybercrime activities in the report's analysed time period. 

They've also played a role in bringing fraudsters to justice globally, including the takedown of cybercrime platforms like Try2Check and Genesis Market, leading to arrests and legal actions against those involved. Visa's comprehensive approach includes real-time transaction analysis, threat intelligence gathering, and improved authentication technology to ensure the safety of the global economy.