[Report] Digital Trust & Safety Index: Content Abuse and the Fraud Economy
By Arwen Heredia /
8 Jul 2020
Content abuse comes in all shapes, sizes, and scams, and the methods behind it have steadily become smarter and more sophisticated since the dawn of digital business. Despite herculean efforts by trust and safety teams to interpret fraud trends and better fight internet criminals, fake content is a uniquely sinister vehicle for hijacking data—because, like any well-constructed ruse, all it needs to be is believable.
In our just-released report, Digital Trust & Safety Index: Content Abuse and the Fraud Economy, we’ve surfaced new consumer insights and data from Sift’s global network to explore how content abuse impacts e-commerce, how it serves as part of an interconnected fraud supply chain alongside payment fraud and account takeover, and what merchants need to know to stop malicious content from harming customer loyalty and stunting growth.
Shifting markets mean new targets for fraudsters
At any given time, fraudsters are looking for opportunities—lax security measures, human error, poor password hygiene, anything that allows them to steal the information they need to commit whatever crimes they’re attempting. With the coronavirus pandemic mutating a once-predictable e-commerce market into a global guessing game, the ways in which content fraud worms its way into advertising, forums, social media channels, dating apps, two-way marketplaces, email, text messages, and everywhere that customers and companies communicate have changed shape, scope, and scale.
Between January and May of 2020—during which COVID-19 snowballed from possible rumor into worldwide crisis—digital marketplaces were hit especially hard by content fraud. According to Sift global network data, attempted content abuse rose by 109% during this time frame as compared to that same stretch in 2019. An analysis of abuse types showed that nearly half of this content fraud was financially motivated, too, with scams making up 46.8% of the content abuse blocked by Sift.
The above illustration details the percentage of user-generated content that was fraudulent, broken down by vertical, across our customers’ websites and apps in the first half of the year (all of which was blocked by Sift). As shown, ticketing and events merchants were heavily targeted, a data point that continues to be supported as we track the pandemic’s impact across e-commerce. This vertical has seen major fluctuations in fraud rates and event volumes week-to-week, and Sift’s Trust and Safety Architects suggest that the erratic trends are likely connected to fraudsters’ usual M.O.: an attempt to exploit consumer fear and unrest. For the many people struggling with stunted incomes and lockdown orders, travel scams offering free getaways or ticketing scams surrounding non-existent streaming concerts make for some tempting bait.
But our research found that content abuse isn’t just an ideal vector for pirating data from individual shoppers—it’s also a primary catalyst for one of the worst things that can happen to any business: brand abandonment.
Content fraud costs more than money
According to the consumers surveyed* for this report, customers are constantly on the lookout for malicious content. And for good reason: they believe (correctly) that it’s everywhere. Over two-thirds (70%) say they’ve run across it on social networking sites; 40% have found it while perusing classifieds; 33% have encountered it on some type of digital marketplace; and 31% have discovered fraudulent content on the discussion forums they frequent. And while we could chalk this data up to circumstance and opinion, it doesn’t especially matter whether consumers’ perception is accurate. It’s what they do once they’ve been victimized by scams—or think they’re at risk of being victimized—that merchants really need to pay attention to.
As illustrated above, we found that 56% of consumers would immediately—and permanently—spend their money with a brand’s competitors after being impacted by content abuse. The thought of losing over half of your customers in the wake of a well-oiled scam is scary enough, but this level of brand abandonment does damage beyond driving major churn. Customer acquisition costs (CAC) would subsequently rise. The lifetime value (LTV) of each of those lost customers (not to mention the brand advocacy and growth they could have driven) would go right down the drain, too—likely right alongside the company’s reputation.
Facing (and Fighting) a Digital Epidemic
Make no mistake: fraudsters are organized, resourceful, and adaptable. And though some prefer to fly solo, fraud rings—wherein multiple people work together to commit fraud—are not uncommon, and can be especially detrimental in serve-yourself marketplaces where user-generated content is critical to the business model.
In this report, you’ll learn how Sift’s data scientists surfaced exactly this type of organization, what they discovered, where in the world it came from, and what trust and safety teams can look out for to keep collaborative criminals from infiltrating digital storefronts with malicious content. You’ll also gain insight into the covert economy hiding just beneath the surface of e-commerce, how consumers think about content fraud, where this vector typically originates, and the types of fake content most often circulated online.
Download Sift’s Digital Trust & Safety Index: Content Abuse and the Fraud Economy to dig into these findings and develop the fraud-fighting strategies your business needs to stay well ahead of scams, spam, and everything in between.