Unfortunately, any business that chooses to open up shop online is in inviting more risk. Over the past few years, as technology has continued to change the way businesses accept and process payments, fraud risks have only increased. According to a new analysis, insurance companies are now most vulnerable to e-commerce fraud as online U.S. insurance transactions grow.
Last month, iovation, a TransUnion company, said it was monitoring the emergence of several new fraud schemes. It shared that, of approximately 10 billion online transactions of all types it analyzed over the course of a year, 5.09 percent were classified as “risky”. However, within these, risky insurance transactions were nearly twice as high – 9.14 percent.
“As transactions move online, so will the fraudsters,” said Melissa Gaddis, iovation’s senior director of customer success. “With U.S. consumers becoming increasingly comfortable transacting with insurance companies online, we expect new types of digital fraud to emerge here like they have in other parts of the world.”
When iovation shared this insurance industry update, along with other key fraud data at the InsureTech Connect 2019 event, the company pointed out that the current spike in risky fraud transactions is directly influenced by younger users accessing insurance apps with mobile devices.
Research by Mintel, a global market intelligence agency, shows that in 2017 just 9 percent of U.S. consumers were using their health insurance provider’s mobile app. One year later, this number nearly tripled to 25 percent. Mintel also discovered that in 2019, 25 percent of millennials were interested in an online insurance application process. Meanwhile, 29 percent of Gen Z consumers said they were interested in using mobile tools for their insurance.
With this increase in fraud risk and in mobile tools for insurance, how can you better protect your insurance business? The key is to be proactive. Start by identifying the different types of fraud, and find solutions that help you protect your business and its customers.
Know the different types of fraud
Fraud can take many forms: credit card fraud, refund fraud, card testing, friendly fraud, identity theft, phishing, mobile fraud, etc. To protect your business, you must educate yourself on the different types of fraud and how to prevent falling victim to them. Experts say by the end of this year alone, mobile attack rates will surpass desktop rates for the first time. Consumers’ continuing to shift to the mobile channel for a growing array of daily activities is responsible for this increase.
Secure the right ecommerce merchant account
Working with the right payment processor is also critical. A reputable high risk provider, for example, will have experience in working with businesses that struggle with ecommerce fraud. Emerchantbroker, for example, offers an ecommerce merchant account that can help your business safely process customers’ transactions and prevent and manage fraud risk and chargebacks.
Don’t let ecommerce fraud hurt your business’ growth and success. Make sure you have the knowledge and tools to protect your business’ future.
Author Bio: Blair Thomas has been a music producer, bouncer, screenwriter and for over a decade has been the proud Co-Founder of eMerchantBroker, the highest rated high risk merchant account processor in the country. He has climbed in the Himalayas, survived a hurricane, and lived on a gold mine in the Yukon. He currently calls Thailand his home with a lifetime collection of his favorite books.
