The Internet is fast becoming the first choice for thieves who might have been petty shoplifters or pickpockets in earlier age. Online retailers are victims of repeated, opportunistic and unsophisticated credit card fraud, made easier by the lack of online detection and a police force unable to cope.
Fraudsters make little effort to cover their tracks. Few Internet thieves bother with a redirection service at the delivery address, and only 10% set up a false telephone account. Thieves often hijack details from an innocent person’s card to buy goods, which they then have delivered to a drop-off address, using the cardholder’s name or a pseudonym.
These are the findings of one of the most extensive surveys on the subject in the UK by Experian. The information solutions company approached 800 online retailers to establish the extent of fraud, its operational impact, the effectiveness of prevention systems and common features in the way fraudsters operate.
Richard Fiddis, chief operating officer of Experian UK, commented, “Our survey shows that online retailers either do no checking at all, or rely on manual fraud prevention measures. Almost half said they do not use any external data when verifying a customer’s name and address before authorising an online transaction.”
Retailers become aware far too late when they have been victims of fraud – two thirds said it took more than a month before a credit card crime was detected. By this time the thief has often got away with it several times on the same web site.
The police seem unable to respond to this new type of criminal activity: 57% of online traders said they had reported frauds to the police, and over half encountered a lack of interest. Only nine per cent of frauds reported to the police lead to a prosecution.
Fiddis concluded, “The use of external information to provide online, real time authentication of the web site visitor’s identity is the best way to tackle this crime.”