Moneris has released new data indicating a 15% decrease in reported fraud cases across Canada in 2024 compared to the previous year. While this decline is an encouraging sign, experts caution that businesses must remain vigilant, as unreported fraud and evolving tactics continue to pose significant risks.
Moneris’ latest report suggests that improved fraud prevention measures and heightened awareness have contributed to the overall drop in fraud cases. However, Yale Holder, Vice President of Customer Experience at Moneris, warns that the numbers may not tell the full story.
“Seeing a significant drop in reported fraud cases, down almost 15 per cent, is encouraging but is a result we’re cautiously optimistic about. Often cases go unreported, and actual fraudulent activity is almost always higher than the data indicates,” said Holder.
The company’s findings highlight key fraud trends that businesses need to monitor, ensuring that they remain proactive in mitigating risks.
MOTO Fraud: The Most Prevalent Threat
Mail Order/Telephone Order (MOTO) fraud remains the leading fraud type in Canada, accounting for 62% of all reported cases in 2024. Despite a 12% decrease from 2023, this method continues to be a major concern.
MOTO fraud occurs when fraudsters provide card details over the phone or through mail, bypassing the need for card-present verification. This method is particularly susceptible to chargeback fraud, where a fraudulent transaction is later disputed by the legitimate cardholder.
To combat MOTO fraud, businesses are encouraged to adopt secure online payment gateways like Moneris Checkout, which integrates fraud prevention tools such as 3D Secure 2.0. This technology shifts chargeback liability to the card issuer, reducing financial exposure for merchants.
Rise in Refund Fraud and Terminal Theft
Another alarming trend in 2024 is the increase in fraud cases related to refund abuse. According to Moneris, refund fraud now accounts for nearly 30% of reported fraud cases, representing a 9% year-over-year increase. This category includes refunds processed on stolen devices, employee-led refund fraud, and abuse of return policies.
Refund fraud has become the second most common fraud type in several provinces, including Ontario, Quebec, and Manitoba. Businesses can protect themselves by implementing stricter administrative controls, such as requiring passwords for refund transactions and limiting access to refund approvals.
Meanwhile, terminal theft remains a growing issue, with refunds processed on stolen payment devices increasing by 3% year-over-year. Now accounting for 16% of all reported fraud cases, stolen terminals enable criminals to process unauthorized refunds or transactions.
To mitigate terminal theft, Moneris advises businesses to:
- Never leave payment terminals unattended
- Conduct regular security checks on devices
- Store terminals out of sight when not in use
- Ensure transactions take place in view of security systems
- Immediately report stolen devices to their payment processor
Regional Fraud Trends
Fraud trends vary by region, with MOTO fraud remaining the top concern nationwide. However, refund fraud on stolen devices ranks as the second most common fraud type in most provinces.
Regional Breakdown:
- Ontario (39% of cases): MOTO fraud remains the most common, followed by refund fraud on stolen devices.
- Quebec (29% of cases): MOTO fraud leads, with refund fraud on stolen devices as the second most reported.
- Alberta (13% of cases): MOTO fraud is the leading fraud type, while account takeover and stolen identity cases have increased.
- British Columbia (8% of cases): MOTO fraud is the most common, with an increase in card-present fraud cases.
The Future of Fraud Prevention
Fraud prevention strategies continue to evolve alongside emerging threats. Moneris emphasizes the importance of staying informed about fraud trends and implementing best practices to mitigate risks.
“Fraud is often a crime of opportunity. Ensuring you have applied passwords to your terminals and using administrative restrictions that are limited to only authorized employees can help to significantly reduce your risk of experiencing this fraud type,” said Holder.
Businesses are encouraged to take proactive measures, such as adopting advanced fraud detection tools, conducting employee training, and maintaining strong internal controls. As fraudsters develop new tactics, staying ahead requires ongoing vigilance and a commitment to security.
