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Key Takeaways: High-Risk Trends From January to December

This is an image of a man touching a screen that says loading. The beginning of the loading bar says '2022' and the end says '2023'.

Bad actors may change their methodologies as technology evolves, but the same offerings emerge year after year. In this recap of LegitScript’s recent webinar, we identify and track seasonal high-risk trends in payment processing and on e-commerce platforms to help you anticipate them. Keep reading to understand what these trends are and how to grow your business more confidently. Or, click the button below to watch the full webinar.

It May Be a New Year — But Many of the High-risk Trends in Card-Not-Present Transactions Remain the Same

Keeping an eye on annual and emerging trends in online transactions is no small feat. Bad actors switch up their methods to avoid detection, but the trends often remain the same. Let’s dive into this recap of LegitScript’s Seasonal High Risk Trends webinar where we discuss common problems that arise in January, February, and March.

 

January: Weight Loss Products for Those New Year Resolutions

Weight loss is regularly the top New Year’s resolution, and supplement merchants know this. Some bad actors package their weight loss products with problematic and unrealistic claims.

Furthermore, some of these supplements are sometimes tainted with active pharmaceutical ingredients or other impermissible substances. Common examples include supplements tainted with sibutramine and phenolphthalein.

January is also the flu season. In addition to weight loss supplements, learn what problematic drug claims some supplement merchants make during flu season.

 

February: Illicit Streaming Services for the Super Bowl

In August 2022, streaming services, or IPTV, officially became more popular than cable television. And sports, in particular the Super Bowl, are some of the most popular events to stream online — both legally and illicitly. Many illicit IPTV vendors capitalize on major sporting events to market their services.

🚩 Illicit IPTV services may offer access to vast arrays of international channels and pay-per-view programming.

 

Illicit streaming services cause as much as $5 billion in losses to rightsholders every year. Illicit IPTV services are easy to spot because they often offer large bundles that may include as much as 10,000 movies or 90,000 channels — all for a suspiciously low cost.

 

March: Fraudulent Fundraising Websites for Natural Disasters

March is the month most known for major natural disasters such as tornadoes, storms, and flooding — inspiring many to give money to relief funds. “Scammers are able to take that and exploit it,” said Claire Guzior, a Merchant Analyst at LegitScript.

🚩 Be wary of fundraisers that don’t clearly state who is raising the money and where it is going.

 

Disaster relief scammers often try to pull at heartstrings with tragic stories to encourage giving.

 

April Showers Bring May Flowers — and Bad Actors Engage in These High-Risk Trends

Everyone knows April brings showers, but it also brings “flower.” And in May, some students seek out extra brain power, while in June, bodybuilders start looking for some more muscle. We’ll go over all of these in detail.

 

April: Consumers Celebrating Cannabis

April 20 (“4/20”) is a celebratory day for cannabis users and an opportunity for problematic cannabis merchants. Online merchants often begin promoting their cannabis and cannabis seeds leading up to April 20.

🚩While any US cannabis merchant offering CNP transactions is problematic by federal standards, watch out especially for merchants offering shipping to jurisdictions where cannabis is prohibited.

Want to understand more about the cannabis landscape? Register for our Deep Dive Webinar Series to learn about the regulatory landscape, recent trends, and more.

 

May: Essay Mills Grinding Out Low-Quality Content

May is prime-time for essay writing mills to promote their services to colleges and university studies approaching finals. Keep an eye out for websites with recycled, boilerplate content.

🚩 Look for short turnaround times. Most legitimate writing/editing services will require a consultation, but fraudulent merchants may promise full-written, custom essays in days.

 

Essay mills may not technically be illegal, but they are fraudulent when they promise students unique content but instead return boilerplate copy. “Professors are pretty privy to this by now,” Guzior said.

 

June: SARMs and Peptides Used Impermissibly for Bodybuilding

Selective androgen receptor modulators (SARMs) and peptides are next on our list of summer high-risk trends. They are commonly abused research chemicals that produce similar effects as anabolic steroids.

Common names for SARMs may include:

  • LGD-4033
  • MK-2866
  • RAD-140

“Some are controlled substances and some aren’t necessarily on the radar yet," Guzior said. The FDA has outlined potential dangers of using these products.

 

These High-Risk Trends Will Get You Heated — and Then Cool You Down

For many people, summer is the time of year to gather, barbecue, and spend quality time with loved ones. Let’s explore what high-risk trends emerge during this vacation season.

 

July: Illegal Fireworks Light the Sky From State to State

It can be difficult to discern a legitimate seller of fireworks from a bad actor selling a substandard product. Consumer fireworks are generally regulated at the state level, and laws vary widely. Furthermore, the US Postal Service banned the mailing of consumer fireworks.

Purchasing fireworks online can be hazardous, especially from overseas manufacturers who may not adhere to the same safety standards as makers in the US.

 

August: Third-Party Resell Ticket Services Boost Chargebacks

Third-party resell ticket services have an important characteristic in common — tickets are purchased from a licensed seller and re-sold at varying prices. This raises the risk of chargebacks when things go wrong.

🚩 Look out for websites that accept payment for a service that won’t be rendered for several months.

September: Online Drop-shippers Target Consumers During Back-To-School Season

With Labor Day and the back-to-school season in September, merchants of every type are seeking to take advantage of consumer spending. Drop-shipping merchants, who often sell smaller-ticket items, may seek to capitalize on shoppers looking for new clothes, sports accessories, and school supplies.

“Drop-shipping” is a term to describe merchants who sell products they don’t actually keep in stock. A seller creates a website with products displayed for sale, and when an order is placed, that order is sent to a third party retailer for fulfillment.

“They don’t have a lot of control over what is shipped, what inventory is there,” Guzior said. “From a consumer standpoint it can be very hairy very fast.”

 

It’s The End of the Year — But High-Risk Trends In Card-Not-Present Transactions Persist

From decorative contact lenses that can harm the wearer to predatory lenders targeting impoverished holiday shoppers — bad actors know how to target consumers online. Read more to understand what high-risk trends to anticipate in October, November, and December.

 

October: The Laws Surrounding Decorative Contact Lenses Can Be Eye-opening

Halloween is a time for interesting costumes — and the costumes are often detailed. One of those details? Decorative contact lenses.

🚩 Decorative contact lenses are mostly Class II medical devices that require a prescription, even if non-corrective.

 

Medical devices are regulated by the US Food and Drug Administration and contact lenses must be dispensed by an ophthalmologist.

Many problematic merchants take advantage of this lack of public awareness by selling decorative contact lenses from overseas that may circumvent federal scrutiny.

 

November: No-Value-Added Services Often Scam Veterans

No-value-added services appear as an offer to perform an action on behalf of the consumer — for a price. The catch? The consumer can usually perform this action without assistance.

Bad actors often offer no-value-added services to vulnerable populations like veterans or immigrants. Merchants claim they can submit forms to the US government and ensure faster processing for documents such as:

  • DD214 (veteran benefits)
  • Visas
  • Passports
  • Immigration documentation
  • Driver’s license applications

Unfortunately, only the government can determine the processing times of government documents, and going directly through the proper authority is generally the best approach.

 

December: Predatory Lenders Often Target Populations With the Least Buying Power

December opens the door for bad actors to target vulnerable populations seeking money for the Christmas shopping season. Payday lending is “largely regulated by the Consumer Financial Protection Bureau,” said Guzior. “[They can be regulated by the] FTC as well.”

🚩 Look out for lenders offering approval within minutes or hours.

 

These merchants offer a wide range of loan types that target consumers with less buying power. They often state “anyone” can apply, regardless of their credit history or score.

 

Download This Guide For Even More Seasonal High-Risk Trends To Be Aware Of Throughout the Year

LegitScript experts track seasonal high-risk trends to help keep our partners in compliance. Download our Seasonal High-risk Trends Guide to learn more about these topics, read case studies, and learn about additional trends we didn’t mention in the webinar.

An image of our Seasonal High Risk Trends guide -- available for download.

Smelting words into subject matter expertise since 2020, Thea Le Fevre specializes in B2B SaaS Content Marketing. She believes in embracing innovation and produces AI-assisted content along with organically crafted content. Take a deep dive into her work for up-to-date industry news surrounding issues in trust & safety, payments risk & compliance, healthcare, and more.

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