Remote Physical Goods Fraud to Grow 18 Percent this Year

A new study from Juniper Research revealed that the value of fraudulent e-Commerce transactions for physical goods would reach $10 billion globally in 2025. That would mark an 18% rise from $8.8 billion last year.

Increasingly complex fraud methods, such as deepfakes and synthetic IDs, are driving the growth of remote physical goods fraud. To counter this, the report identified liveness detection, an anti-spoofing solution that is used to check the authenticity of identities, as key to minimizing losses to this fraud in the future.

The report warned that a comprehensive portfolio of fraud prevention tools is needed to minimize these losses. It predicts that behavior-linked verification solutions will be the key to diminishing the effectiveness of fraud strategies. Given consumers typically make purchases from a limited number of frequently used locations, geolocation verification is a highly valuable tool in fighting fraud.

“e-Commerce merchants must couple automated AI defense systems with human-piloted checks. This will combat sophisticated fraud tactics, such as synthetic returns labels and accurately weighted packages, that have enabled fraudsters to receive eCommerce goods for free,” said report author Thomas Wilson.

The research also found that combining continuous checks, such as behavioral analytics with step-up verification via biometrics, can recognize fraud patterns that humans often miss, and must be deployed to help identify patterns in real-time. Therefore, vendors must develop solutions that focus on fighting tactics that deceive prevention tools at key points in the customer journey, most prominently, the point of payment.