Resellers lost over £7.2m to 'card-not-present' credit card fraud last year and could stand to lose a much greater figure this year, according to new research.
Total fraud on card-not-present purchases has jumped by a third over the past two years to £109.6m.
It is now the second-largest element of the £411.6m worth of fraud committed using debit and credit cards, according to findings from the Association for Payment Clearing Services (Apacs), a UK banking trade association.
Neil Munroe, external affairs director at credit reference agency Equifax, said criminals are widening their victim base and an increasing number of SME resellers are falling prey to them.
"There is no doubt bigger suppliers are tightening up their processes and fraudsters are moving into new areas," he said.
Fraud has been a growing concern in the channel. Only last week CRN reported that reseller Addictivity had found itself in trouble after being hit by credit card fraud over the telephone which cost it about £70,000.
A representative of Apacs advised businesses to speak to their clearing banks to find out about the technical solutions available. "These include Address Verification Services and Card Security Code software," he said.
Dixons Group, which implemented this technology recently, claims it has helped it to halve card-not-present fraud over the past 12 months.
Peter Robinson, Dixons Group retail controller, said: "It's a combination of staff awareness, supported by systems, that have enabled Dixons Group to cut 'card-not-present' fraud against the sector trend. But constant vigilance is necessary."
Glenn Morrisson, managing director of components distributor Upgrade Options, said that after numerous attempted attacks, the firm now uses transaction processing company Data Cash to check credit card buys.
"With credit card fraud it is the VAR that gets stitched up and has to pay up," he said.
Itac comes under attack
Distributor itac (UK) is the latest victim in a growing number of identity fraud cases sweeping the channel.
The Manchester-based firm was stung for £30,000 after fraudsters made off with 12 Artico plasma screens.
Mark Brooks, new business development manager at itac, said the thieves used the name of a credible Birmingham-based reseller to front the scam, before collecting the goods outside the reseller's premises. The VAR cannot be named for legal reasons.
"We did stringent checks, but it wasn't enough. We will do more physical checks on firms from now on," he said.
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