The USA has more e-commerce fraud than Nigeria

Sift Science customers hail from all six habitable continents. We’re seeing e-commerce fraud activity from practically everywhere as well, Albania to Vietnam. Since the Sift Science team includes quite a few data geeks who love #uberdata and OkCupid’s OkTrends blog, we thought we’d share a visualization of our global fraudulent transactions. What sort of fraud are we seeing? That deserves its own post (coming soon), but there are three major types: payment fraud (e.g. using stolen credit cards to buy goods), new account fraud (i.e. creating an account to do illicit stuff like money laundering) and account takeover (i.e. using someone’s existing account to do illicit stuff).

Global e-commerce fraud rates by country

Fraud rates are drawn in shades of red. Darker red indicates a higher rate of fraud, and the pink-to-white countries have lower frequencies of fraud. Gray means we had too few cases of fraud to meaningfully measure– we’re looking at you, Greenland.

Above is a map of fraud rates by country. Based on a sample of our transaction data, here are the top ten most fraudulent countries. You can see the top 25 countries at the end of the post.

  1. Latvia
  2. Egypt
  3. United States
  4. Mexico
  5. Ukraine
  6. Hungary
  7. Malaysia
  8. Colombia
  9. Romania
  10. Philippines

Biggest surprise? Nigeria. For all of the flak Nigeria gets with their e-mail scams (not all of which originate in Nigeria), we’re not seeing a lot of fraud from Nigerian IPs. In fact, Nigeria (#17) has only slightly more fraud than Canada (#18).

Several caveats are worth noting. Since this is based on a sample of our collected transaction data, it is not necessarily representative of the overall e-commerce fraud rates globally. For simplicity’s sake (developer time is a precious commodity at Sift!), we used the reported IP address as the country of origin. Lastly, just because a country shows up as higher fraud on this list doesn’t mean a merchant should create a fraud rule for it. We instead suggest adopting a more robust and versatile solution able to adapt to new patterns.

For our more technical readers– we used just over half a million transactions and included only those countries with at least 1000 total samples and at least 10 fraud samples. That puts the size of the 95% confidence interval on the fraud rate at just under 1%. To draw the map itself, we used d3 with topojson. Then, we overlaid the countries onto a Mercator projection, and computed the color as [percent of transactions labeled as fraud]*[max red saturation].

In the future, we’ll be sharing other insights from the terabytes of data we analyze to detect fraud. What would you like to see? Get in touch via Twitter or email with your suggestions.

Here are the top 25 fraudulent countries, from most fraudulent to least fraudulent.

  1. Latvia
  2. Egypt
  3. United States
  4. Mexico
  5. Ukraine
  6. Hungary
  7. Malaysia
  8. Colombia
  9. Romania
  10. Philippines
  11. Greece
  12. Brazil
  13. China
  14. Indonesia
  15. Russia
  16. Singapore
  17. Nigeria
  18. Canada
  19. Portugal
  20. Switzerland
  21. United Kingdom
  22. India
  23. Netherlands
  24. France
  25. Austria
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4 comments

  1. Interesting data!

    One question, when you say “we used the reported IP address as the country of origin”, let’s say for Latvia, it does not mean that all frauds reported for Latvia happen in Latvia itself right? It could be the IP addresses from Latvia that are performing fraud not only in Latvia but also in other countries.

    Is this right?

  2. I’m from the US but live in #5 Ukraine. I dread when I have to buy or renew something online. Royal pain in the ass. Recently I just started spinning up a VM in the US and doing my ordering. Oddly enough the one company which has never said a word is… PayPal. They are quite notorious for block & locking accounts.

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