Online fraudsters get more 'brazen'

Cybersource quarterly report reveals fraud still a major problem for UK retailers, despite increased investment

A lack of support from law enforcement agencies continues to hamper UK retailers’ effort to quell the spread of online fraud.

According to figures in the fourth annual UK Online Fraud Report from payment management firm CyberSource, retailers are ploughing over 50 per cent more funds into fighting fraud than a year ago, but are still being caught out.

In total, 38 per cent of retailers surveyed came from businesses with online turnover between £1m and £10m. The remainder were divided between small businesses (£0-10m turnover), large businesses (£10m-50m turnover) and very large businesses (£50m+ turnover).

The report revealed it is the larger players being hit the hardest. The figures stated that 42 per cent of large online retailers had been aware of fraudsters targeting specific products, with a further 25 per cent recording instances of criminals trying to find and exploit upper and lower transaction limits before orders are manually looked at by staff.

In comparison, 23 per cent of smaller retailers had witnessed specific product targeting, with just three per cent spotting transaction limit testing activity.

CyberSource added that 71 per cent of all respondents had invested in anti fraud payment measures such as Verified by Visa and MasterCard SecureCode, but hinted that until help is given from higher authorities, the problem of fraud will continue to grow.

“Managing the fraud problem is not getting any easier,” the report summarised. “Continued lack of action from law enforcement authorities has made criminals confident of getting away with it, and so they are becoming increasingly bold.

“The burden of managing fraud remains squarely on the shoulders of merchants, but a more effective approach from law-makers and the police is required to actually tackle the problem,” it said. “As long as criminals believe they can get away with committing fraud against online merchants, the problem will continue to grow.”