Professional Security Magazine: Payment Fraud Survey05-Jun-2014
Fraudulent use of stolen credit cards, the biggest area of online loss, is down by 8 per cent since last year, an industry survey has shown. Published by Retail Knowledge and sponsored by payment product firm Kount, the UK Retail Fraud Survey 2014, now in its fourth year, reports on the systems, processes and strategies of 100 of the UK’s top retailers.
The survey has found online fraud prevention spend has increased from 0.3pc of sales in 2012 and 0.4pc in 2013, to 0.43pc this year. As a result there has been a major decrease in shrink in online credit card fraud from 51pc in 2013 to 43pc in 2014. This is a decrease of 8pc from last year’s figure. This link between increased spend and reduced online credit card fraud shows the surveyors say how the industry is recognising the importance of online fraud prevention.
Don Bush from Kount stresses the growing importance of online fraud prevention: “Ecommerce grew a healthy 18pc in 2013, cybercrime grew at about 23% in the same period which greatly emphasises the need for a robust online loss prevention strategy. Detecting, preventing and managing fraud is a full time vocation and getting the people, processes and technology right to beat fraud is crucial.”
Despite this decrease however, many of the other areas of online loss have seen an increase in shrink since last year:
- Third party fraud payments rank next at 15pc of shrinkage, an increase of 4pc since last year.
- Accounting for 13pc of loss is card testing which has seen an increase of 3pc.
- Friendly fraud has seen no change since last year and remains at 9pc.
- The online channel proves much more difficult for employees to steal through. Internal fraud online is much lower than employee theft from stores, as physical access to products is limited to warehouse staff only.
Other findings show that most retailers still treat store and online loss prevention separately. However, employees, customers and fraudsters do not make this distinction. Retailers expect online sales to increase from 12pc currently to 31pc of total business over the next three years. As this happens, an adoption of an increasingly joined up philosophy to all loss prevention, store and online, will be crucial. Visit www.kount.com