UK ecommerce fraud soared in 2018, hitting nearly £400m; this accounted for the vast majority (78%) of all card not present fraud (CNP). This spike in fraud has many asking what exactly is fuelling the disturbing growth of fraudulent activity and financial loss for UK merchants.
According to UK Finance, the ongoing epidemic in data breaches and social engineering. The banking industry group’s annual roundup, Fraud the Facts 2019, claimed that £393 million of e-commerce fraud amounted to 59% of total card fraud – a 27% increase on 2017 figures. The report also delved deeper into the types of rapidly growing fraud plaguing both merchants and consumers.
In 2018, there were several high-profile data breaches that took place; breaches that affected very significant brands. There were also a number of lower-level incidents. The problem with these breaches is that the data stolen can be used for months, even years, after the incident. To complicate matters even further, criminals like to use the publicity that surrounds data breaches as an opportunity to trick people into revealing their financial information.
“Data compromise, including through data hacks at third parties such as retailers, is a major driver of these fraud losses, with criminals using the stolen card details to make purchases online,” the UK Financereport explained.
Phishing Emails and Text Messages
The report went on to claim that the rising number of phishing emails and scam text messages are also to blame. Social media scams that advertise the sale of discounted ‘goods’ are also a growing problem.
“When a customer goes to buy the product, the criminal uses their card details to purchase the item from a legitimate source and then keeps the payment from the customer,” the report says.
CNP fraud (which includes phone and mail order) accounted for 76 percent of the total losses last year. In fact, it rose 24 percent from 2017-18 to an overwhelming £506m, with over two million cases recorded. According to the report this is a 47 percent increase from 2017.
Authorized Push Payment (APP)
Authorized push payment (APP) scams are another area of fraud that is growing fast. These scams soared 90 percent in volume and 50 percent in value to reach £354m in losses just last year. The report claims that fraudsters use of social engineering tactics through deception and impersonation scams is the main driver of APP scams.
These scams typically involve the criminal posing as an individual or organization. They contact the victim using methods like telephone, email or text messages. They might even use social media as a way to approach their victims. According to the report, APP fraud has also hit businesses hard, accounting for nearly 36 percent of total losses.
If you are worried about how fraud will affect your business and its customers this year, you are not alone. One of the best ways to protect your business is to be proactive and partner with merchant service provider that will help you detect and prevent fraud. To learn more, consider the many reviews and information Best Payment Providers has to offer, like universal transaction processing.
Author Bio:Payment industry expert Taylor Cole is a passionate merchant account expert who understands the complicated world of accepting credit and debit cards at your business. His understanding of the industry and universal transaction processing has helped thousands of business owners save money and time.