Newark’s sophisticated transportation system has earned the city a top spot in the nation for its role in facilitating online fraud, a cybercrime defense expert found.
“Places with areas where goods can be swiftly and unnoticeably transported perpetuate reselling and reshipping stolen goods on the black market,” said Alisdair Faulkner, CEO of fraud protection software provider ThreatMetrix. “If you’re in a transportation hub, why knock someone out on the street when you can do it from your couch?”
In a review of nearly 1 billion transactions performed by e-commerce merchants in the first quarter of 2012, ThreatMetrix ranked the top 150 cities in the United States according to the volume of high- and medium-risk transactions. According to the analysis, Newark ranked 30th highest, even though it is only the 68th most populous city in the country.
According to Faulkner, fraudsters near transit hubs will advertise to people who work from home for a repackaging and reshipping business, but they’re really hired to re-ship merchandise that had been ordered from mail-order or auction sites and not paid for.
Faulkner also noted that data breaches in payment processors or merchants clustered within a city result in a large amount of stolen credit card data, which result in increased fraudulent transactions.
“With people going online more often to complete transactions, there have been more and more data breaches,” Faulkner said. “To lower risk, the number-one thing is to really know your credit card statements. Fraudsters will do little transactions, like buying $5 in virtual money from Facebook, to test if they’ll get caught. Then, they’ll do a big run, like a $2,000 plane ticket.”
Faulkner said for businesses to protect themselves against online fraud, it is necessary to make sure security systems are up to date and to invest in cyber crime insurance, as it can cover the cost of informing customers that their information has been compromised.