Buy now, pay later (BNPL) transactions have increased by 182% in 12 months, but as Black Friday looms, LexisNexis Risk Solutions has warned the risk of fraud is high.
In its LexisNexis Risk Solutions Cybercrime Report H1, 2021, the company states a major risk from fraud lies in the ability of fraudsters to use stolen credentials to open new accounts. As BNPL providers typically use ‘soft’ credit or identity checks, they are unlikely to find potential fraud indicators, such as the email address or mobile number not being linked to the named account.
The only way to prevent this is by using technology that can check this within seconds and not interrupt the application process.
Another successful fraud method is account takeover. This sees a fraudster use stolen credentials of an existing BNPL user to make purchases. To prevent this, a solution should be using tools to verify an individual’s identity and dynamically add layers to verification.
LexisNexis senior solutions consultant, fraud and identity Kate Dunckley said, “Fraudsters will always look to exploit new avenues wherever possible. With the increased levels of online shopping activity in the period around Black Friday, Cyber Monday and the festive retail season, we’re facing a perfect storm that is likely to lead to a surge in risks for both businesses and consumers.”
“With an increased volume of transactions expected over this period, there is greater opportunity for fraudulent transactions to slip under the radar – something fraudsters know and will always look to exploit. To add to the complexity of the problem, Black Friday and Cyber Monday sales now often occur across several days, even weeks, meaning that attacks can be spread across a much longer period.”
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