Discover the True Cost of Fraud

Discover the True Cost of Fraud

Navigate the rising risk of fraud and learn how to grow your business safely.  Explore current fraud costs, attack rates, trends, challenges and recommendations for your industry. 

The True Cost of Fraud™ Study

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Critical Insights on Key Fraud Cost Drivers

The True Cost of FraudTM Study offers an accurate picture of current fraud trends in the U.S. and Canadian retail and financial services industries by analyzing in-depth surveys from over a thousand fraud executives every year. 

Building on 12 consecutive years of research, the study explores the evolution and expansion of fraud and shares insights and recommendations on how to better protect your business, successfully manage fraud risks and strengthen customer trust and loyalty.

Select a True Cost of Fraud™ Study from the tabs below:

Explosive Growth of Ecommerce and Retail Fraud

Fraud costs rise 15%

The results of the True Cost of FraudTM Study for Ecommerce and Retail are available, and what they reveal should be of concern for those businesses. This year’s findings show a substantial increase both in cost and volume of fraud.

Every $1 of fraud now costs U.S. retail and ecommerce merchants $3.60 which is 15% higher than the pre-Covid study in 2019 which was at $3.13. This also represents a 7.1% rise since the 2020 survey which was conducted during the pandemic. Canada too, saw a significant increase since 2020. Its cost of fraud is up 5.2%, bringing the cost of fraud up to $3.02.
U.S. the cost of fraud continues to rise chart

Complete the form to download the 2021 study

The Year of Mobile

Another alarming trend? Both the U.S. and Canada had more fraud costs attributed to the mobile channel than in prior years. The pandemic pushed more consumers and fraudsters to do digital transactions, and because people rely on their smartphones, the surge was especially great on mobile. 
Recognizing the convenience of mobile transactions, consumers are unlikely to revert to prior behaviors, even when the pandemic is long over. Merchants will need to revisit security on their mobile channel if they’re to avoid additional exposure to fraud.


Additional True Cost of Fraud Study Highlights from 2021

Identity Verification Challenges

Identity fraud remains a key issue for merchants and represents a larger share of fraud losses compared to previous years. Breached digital-identity data (e-mail addresses, phone numbers) are being linked to synthetic identities and more account-takeovers.

Changing Payment Methods

The payments landscape is rapidly changing. Merchants are involved in more transactions involving non-bank, third-party payment providers, and that situation brings with it new, often unexpected risks.

Integration of Cybersecurity and Digital Customer Service

More U.S. and Canadian merchants are integrating their digital/customer experience operations with fraud prevention, as they attempt to minimize customer friction, especially since abandonment is a common risk with remote channel transactions.

Cybersecurity Alerts

Just over one-half of U.S. and Canadian merchants are using cybersecurity alerts to support fraud prevention, with more U.S. retailers also using additional fraud support capabilities.

Verify Online and Offline Traits

To be effective, security solutions must be able to verify both physical and digital identity attributes across different customer touchpoints and assess transaction risk in a fast, seamless manner for customers.

The Payoff for Using Best Practices

Merchants who invest in best-practice, multi-layered solutions that are integrated with cybersecurity and digital experience operations experience a 71% lower volume of successful fraud attacks and a 12% lower cost of fraud. 


Insights From Past Ecommerce and Retail Reports


2018 True Cost of Fraud™ Study Retail 

2019 True Cost of Fraud™ Study Retail

2020 True Cost of Fraud™ Study Retail

Pandemic Causes a Significant Rise in Fraud on Financial Services and Lending Firms

Fraud attacks increased in 2021 according to True Cost of Fraud™ Study.

LexisNexis Risk Solutions True cost of fraud study cover
Digital transformation was already well underway when the pandemic hit, but there’s no denying that COVID-19 greatly accelerated the trend. In doing so, it fundamentally changed how people interact with businesses in a very short time.

Consumers, even those who were less tech-savvy, rapidly migrated to online and mobile channels. Unfortunately, so did fraudsters. And they did so with fervor, continually testing and refining their methods, seeking out new vulnerabilities to exploit. 

LexisNexis® Risk Solutions has been tracking the true cost of fraud for more than 11 years. The LexisNexis® True Cost of FraudTM Study Financial Services & Lending Report edition explores the:

The impact of COVID on the cost of fraud

Impact of COVID-19 on
fraud costs
Dynamics driving fraud risks

Dynamics driving fraud risk
Org Challenges Customer Centric for the cost of fraud

Organizational challenges
of fraud prevention in a
customer-centric world
The delicate balance of the cost of fraud

Delicate balance of fraud
security versus customer
friction


Fraud Attacks Increase For Financial Services and Lending Firms

Complete the form to download the 2021 study

Many businesses found themselves playing catch-up in their online security. Fraud surged, and what soon became clear, was that organizations had to step up their prevention methods if they were to keep pace in mitigating risk. They could no longer react to fraud after it happened; they needed to be proactive or risk significant losses.

In particular, financial services and lending companies became a frequent target. In our latest report, the “2021 True Cost of Fraud Study--Financial Services and Lending Companies,” we examine how these businesses handled the fast rise in fraud and what they’re doing going forward. What processes have they implemented? What’s types of fraud are trending? What prevention methods are working and what’s not?

The findings are based on a survey of 500+ risk and fraud management executives in financial services and lending companies in the U.S. and Canada. Subject areas include fraud attacks, costs, mobile channel impact, customer journey fraud risks and fraud prevention best practices. Get all the latest facts, figures and recommendations.
Phone over keyboard on true cost of fraud

The Rising Cost of Fraud

The cost of fraud for U.S. financial services and lending firms is between 6.7% and 9.9% higher than before the pandemic. This is driven by mortgage
lending (up 23.5% since pre-COVID-19) and a continued upward trend among banks (+13.0%). Fraud costs and attack volumes remain significantly higher
compared to before the COVID-19 pandemic. U.S. banks and mortgage lenders are driving much of this.


There was clearly a spike in fraud costs and volume at the start of the pandemic, as these rose significantly in 2020 and have softened some for credit lending
and investment firms (though still above pre-pandemic levels).


Key Challenges in the Fight Against Fraud

Frustrated man on computer on true cost of fraud
The online and mobile fraud landscape continues to evolve. Fraudsters are relentless, constantly seeking new vulnerabilities to exploit. Financial services companies and lending institutions can’t ever let down their guard. Being prepared for all types of fraud is critical.

As more transactions are conducted online and digital channels expand, financial businesses will be exposed to new threats, including some that may not be detectable with their current
fraud and risk mitigation processes.

Security measures can’t be too onerous. Customers expect fast, convenient interactions. And they want the ability to flow seamlessly between platforms and devices. Any friction can result in a negative customer experience that tarnishes the brand.

See the Way Forward

True Cost of Fraud Financial Services and Lending Study covers a lot of ground, but it also clarifies the five biggest challenges as you fortify your risk management strategy, particularly with mobile and international transactions:

Post-Pandemic Fraud Costs
Remain High

Fraud is Surging in Mobile Transactions

Fraud Occurs Across the Customer Journey

Fraud is Increasingly Sophisticated

Organizations Should Employ a Multi-Solution Layered Approach
Study findings underscore the value of adding third-party, real-time data and transaction tracking tools.

There’s also a need to employ more digital identity and behavior data and analysis to overcome the complexities of “faceless” digital channels.

Balance is key: Best results come from a multilayered approach incorporating different levels of authentication and verification appropriate to the potential risk of the transaction. The toolset should include advanced identity verification and risk assessment solutions that understand the nuances unique to digital and physical channels.

Get caught up on the latest information in financial services and lending fraud and download the study now.

Insights From Past Financial Services and Lending Reports

2018 True Cost of Fraud™ Study Financial Services

2018 True Cost of Fraud™ Study Lending

2019 True Cost of Fraud™ Study Financial Services and Lending

2020 True Cost of Fraud™ Study Financial Services and Lending

LexisNexis and the Knowledge Burst logo are registered trademarks of RELX Inc., used under license. LexisNexis Fraud Multiplier is a service mark of RELX Inc. ThreatMetrix is a registered trademark of ThreatMetrix, Inc. True Cost of Fraud is a trademark of LexisNexis Risk Solutions Inc. 

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