Online fraud is a massive problem in the U.S., with perpetrators who are fast, organized, and sophisticated. So, how can you make sure your business is staying one step ahead? This report uses big data from Sift Science to reveal surprising insights about who’s committing online fraud, how they’re doing it, and where it's happening.

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Fraud is a giant, growing problem in the US
● In 2012 alone, merchants lost $3.5 billion to fraud1
● 12.7 million Americans were victims of identity theft in 20142
1 Cybersource, Online Fraud Management Benchmarks
2 Javelin, Future-proofing Card Authorization

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Sift Science processes tetrabytes of data from
thousands of websites to predict fraud
● 40 million events ingested
● 7 million risk scores calculated
● 70,000 labels created
…. every day
…. for more than 2,000 domains

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We wondered...
who’s committing fraud how they’re doing it where it’s happening
what would our data have to say about:

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How we crunched the numbers
We focused a year’s worth of data (August 2014 - August 2015), taking a
sample of 1.3 million transactions with shipping or billing address in the
U.S.
We computed the fraud rate as the number of fraud users as a fraction of
all users.
So, what did we find?
.

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The Fraudiest Person In America
● Male
● Identifying as 85-90 years old
● Buying something worth $0-
20
● Buying something with a
billing address in Alaska
● Shipping something to
Delaware

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The Fraudiest Person in America doesn’t really exist.
He’s a composite of separate strong fraud signals, not a single individual.
Just remember...
(So don’t assume that an 88-year-old
Alaskan buying a shirt for his
granddaughter in Delaware is a
fraudster…)

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The Fraudiest Behavior in America
● 3am is the fraudiest time of
day (regardless of time zone)
● Users with 2-4 accounts linked
to a single device are 8x more
likely to be fraudsters
● Accounts less than 3 days old
are 3x more likely to be fraudy
● Purchases worth less than $20
are 2x more likely to be
fraudulent

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The Fraudiest States in America
● Delaware, Florida, and
Nevada have the highest
fraud rates by shipping
address
● Alaska, Delaware, and
Arizona have the highest
fraud rates by billing address

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The main takeaway
Tackling fraud is complex, and fraudsters are good at masquerading as legitimate
users.
Machine learning technologies give you the power to unearth hidden fraudsters
and predict fraud before it happens.

11. Want to know more?
Read the full United States of Fraud report
Discover how we can help your business at siftscience.com