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Consumers and Retailers Split on the Handling of Online Fraud

David Paul

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e-commerce fraud
A new global study has revealed a widening gap in how well companies and shoppers believe e-commerce fraud is being dealt with.

There is a widening confidence gap between consumers and retailers on the handling of online fraud, new research has revealed.

Software firm Riskified spoke to 4,000 consumers and 400 retailers from the UK, France, Germany, and the US and found a “dramatic difference” between firms and consumers views of the threat of e-commerce fraud, and who is to blame.

Around 55% of all retailers said they were confident in their ability to prevent e-commerce related fraud. However, only 34% of consumers said they trust in retailers’ ability.

Consumers said they believed that firms should be “doing more” to combat fraud, which has become more prevalent during the pandemic as more people shop online.

Riskified found that, in the US alone, more than three quarters (82%) of retailers have seen an increase in fraud attempts since the pandemic began, such as promo abuse (46%) and account takeovers (43%).

Merchants in the UK and the US are much more confident in their abilities, Riskified data suggested. Additionally, retailers, in general, have confidence in their ability to combat online threats.

In Britain, 62% of firms said they were confident in their ability to combat fraud, whilst only 34% of consumers felt the same way; the largest gap out of the countries surveyed.

The UK’s national reporting centre for fraud and cybercrime, Action Fraud, previously discovered UK shoppers have lost millions to fraud and scams since the beginning of the first lockdown.

Figures indicated that more than 16,000 consumers had fallen victim to online shopping and auction fraud since the onset of the pandemic.

Javvad Malik, security awareness advocate at KnowBe4, commented: “E-commerce fraud is not a simple challenge to face. There are a variety of reasons why fraud may occur. It could be due to criminals exploiting a weakness in the provider’s software.

“However, many times it can be down to the consumers being scammed directly either through phishing or telephone calls. It can also be if a user chooses a weak password, or reuses a password, it can allow criminals to access their online account.

“In such circumstances, it’s not fair to place the blame on the victim, and not the e-commerce retailer. If the retailer puts in place too many security controls, that in itself can turn away customers who would see the transaction process as being too cumbersome.

“While some retailers could increase some security controls and put in place better fraud detection tools, the real difference will come where everybody works together to play their part in maintaining security. This includes retailers continually educating users by raising awareness of frauds that can occur and best practices to prevent the likelihood of fraud occurring.

“Ultimately, in today’s age, many people are aware of the risks of e-commerce and the risk of being a victim of fraud. Retailers should have easy and convenient reporting processes in place to help any customers that may have become a victim of fraud. By providing quick remediation, customers are more likely to retain trust with the brand.”

It is not just e-commerce that is letting the public down. The banking sector, too, has continued to suffer problems with cybercrime over the last 18 months and banks have failed to support their customers, according to Which?

Research discovered that some of the UK’s largest banks have failed to provide adequate support to fraud victims once they fall victim to cybercrime. That and poor customer service have left customers feeling ‘abandoned’ and exposed to future scams.


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In May, a coalition of 17 business and consumer groups urged the UK Government to do more to ensure that consumers are “better protected” from online fraud.

The organisations wrote an open letter to Westminster calling for the introduction of new laws into the Online Safety Bill or risk the UK “failing in its ambition to be the safest place in the world to be online”.

Data collated by the National Fraud Intelligence Bureau in August this year found a spike in fraud and cybercrime, with the UK seeing a three-fold increase in financial losses from fraud and cybercrimes in the first six months of the year.

In total, £1.3bn was lost to cybercrime over that period compared to £414.7m from the same period in 2020. Cybercrime saw a seven-fold rise, going from 39,160 cases to 289,437.

David Paul

Staff Writer, DIGIT

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