Cybersecurity|Cyberthreats
$1.45B lost over Online Shopping Fraud in 5 years
Over the last 5 years, Online Shopping Fraud has been the second most common fraud type in the US, following Imposter Scams. As per FTC (Federal Trade Commission), Online Shopping and Negative Reviews Fraud covers undisclosed costs, failure to deliver on time, non-delivery, and refusal to honor a guarantee on purchases made online, internet auctions, and businesses trying to prevent people from giving honest reviews about products or services they purchased. Just a heads up, for the sake of simplicity, we’ll be using a slightly shortened term, “Online Shopping Fraud,” instead of “Online Shopping and Negative Reviews Fraud.” Let’s see what happened over the past 5 years, shall we?
Key insights
- Since 2019, 1.7 million Online Shopping Fraud cases have been reported in the US, accounting for 15% of all fraud cases. Statistically speaking, this translates to over 40 Americans falling victim to Online Shopping Fraud every hour over the last 5 years.
- Naturally, with the surge in online purchases, fraud rates increased as well. Most Online Shopping reports were registered in Q2 2020, right after the outbreak of Covid-19. There was a steep increase of over 100%, rising from 63k reports in Q1 2020 to 132k in Q2 2020. In contrast, other fraud types experienced a more modest increase of 30% that quarter. For a closer examination of these trends, click on the red dot next to Online shopping Fraud or the gray one next to Other Frauds in the infographic above.
- Roughly half of the Online Shopping Fraud victims encountered financial losses totaling $1.45 billion. To put it into perspective, on average, Online Shopping victims lost over 16 hundred USD each.
- Florida and New York have consistently ranked as the two most affected states by Online Shopping Frauds for the past 5 years. Florida leads with 95K fraud reports, followed by New York with 89K. The third state by victim count — New Jersey — falls significantly behind with 40K Online Shopping Fraud victims.
Methodology and sources
This analysis used 2019-2023 Q3 open-source information from the Federal Trade Commission (FTC). We looked into quarterly trends of Online Shopping Fraud vs. Other types of Fraud. The number of reports of Other Fraud was derived by subtracting the Online Shopping Fraud count from the total Fraud count. Our analysis involved the aggregation of financial losses and victim count with the losses related to Online Shopping and Negative Reviews Fraud, from which we derived average financial losses per victim. Note: we use fraud report count and victim count interchangeably.
For the complete research material behind this study, visit here.
