[Report] Digital Trust & Safety Index: Account Takeover Fraud and the Growing Burden on Business

Account takeover fraud has plagued e-commerce merchants since the dawn of online business. But the past few years haven’t only proven how pervasive ATO is across every industry—they’ve revealed that it’s the typical fraudster’s weapon of choice. Between Q2 2019 and Q2 2020, overall ATO rates (the percentage of total logins that were stopped because they were fraudulent) surged by 282% across the entire Sift global network.

Physical and digital e-commerce were hit particularly hard compared to other market segments. Coupled with 2020’s disrupted economy, this astronomical jump has put risk teams in a tough position. Predictions have become unreliable and patterns unpredictable, leaving trust and safety experts without the usual fraud-fighting tools and data they depend on.

The Creeping Cost of Account Takeover

A more urgent concern for merchants is the mounting evidence that account takeover fraud has the power to topple businesses from the outside in, doing damage that goes beyond a fraudster’s immediate control. When we asked consumers how they’d respond to an account they owned being hacked, nearly one-third of respondents said they’d stop using the impacted site or service and turn to a direct competitor.

Losing 28% of one-time customers is a major problem on its own. But if businesses consider the average customer’s lifetime value (LTV), as well as how customer acquisition costs (CAC) are impacted, the consequences of account takeover get exponentially bigger—and even the most accurate data doesn’t include the fallout caused by negative reviews and a reputation stained by fraud.

In our latest report, Digital Trust & Safety Index: Account Takeover Fraud and the Growing Burden on Business, we share the story behind these findings. With insights derived from our global merchant network of over 34,000 sites and apps across e-commerce, in addition to a survey of 1,000+ consumers, this report gives online merchants direct visibility into why, how, and when account takeover fraud can disrupt a business. From surprising user expectations around data security to ATO’s impact on buying behavior, we share what fraudsters rely on to exploit security loopholes, and which verticals are under fire from opportunistic fraudsters in pandemic-era e-commerce.

Download it here.