LexisNexis Risk Solutions has released the 2019 True Cost of Fraud report in Mexico that surveyed 90 Mexican executives in retail commerce, e-commerce and financial services to show the cost of fraud in Mexico, the company announced on Wednesday.
“Advanced global solutions prevent fraud as it evolves, even when it crosses geographic borders and organizations. With tools like consortium-based data sharing and bot data management combined with automated alerts, organizations can employ necessary innovations to help them stay ahead of fraudsters," said Rafael Costa Abreu, director of fraud and identity for LexisNexis Risk Solutions.
LexisNexis’ survey revealed that the cost of fraud in Mexico has trended upward, amounting to 1.96 percent of annual revenues of Mexican companies overall, in retail, e-commerce and financial services, compared to 1.75 percent in 2018.
The LexisNexis Fraud Multiplier, which measures the cost organizations actually lose for each dollar of fraud lost, found Mexican merchants in 2019 paid 3.55 times the amount of each fraudulent action, up from 3.39 times in 2018, including losses related to the transaction face value, fees and interest incurred, fines and legal fees, labor and investigation costs and external recovery expenses.
The report revealed that e-commerce on mobile phones increased to 3.87 times the amount of the lost transaction value, up from 3.75 times in 2018. The fraud growth in the mobile channel has been projected to continue, rising as the number of financial transactions on mobile devices continues to grow.
The study also shows that many Mexican companies today are not fully equipped to address mobile fraud since they do not track, nor do not have the proper tools to track fraudulent transactions. This is key given that Mexico ranks second in LATAM, after Brazil, as the top cyber attacker in the region.
LexisNexis noted that Mexico’s primary challenge has been verifying identities when people use online channels or mobile phones to transact. Identity fraud accounts for more than one-third of fraud losses in Mexico. Third-party identity theft accounts for 25 percent and synthetic identity fraud accounts for 12 percent.
"Although fraud in Mexico continues to evolve – as seen within this shift towards mobile fraud – organizations can effectively combat fraud with a layered solution approach to not only slow fraud growth, but help stop fraud before it occurs.”
About LexisNexis Risk Solutions
LexisNexis® Risk Solutions harnesses the power of data and advanced analytics to provide insights that help businesses and governmental entities reduce risk and improve decisions to benefit people around the globe.
We provide data and technology solutions for a wide range of industries including insurance, financial services, healthcare and government. Headquartered in metro Atlanta, Georgia, we have offices throughout the world and are part of RELX (LSE: REL/NYSE: RELX), a global provider of information-based analytics and decision tools for professional and business customers across industries.