Cases of online fraud remain stable but remain a worry for merchants and customers
Cases of online fraud have stabilised since 2015, according to the ‘Fraud Attack’ Index report from Forter and the Merchant Risk Council (MRC). Yet retailers and customers must remain vigilant.
It is important to note that 2016 was a painful year for cyber security, when cases of fraud and hacking skyrocketed. So, the fact that numbers remain stable is not necessarily encouraging.
Indeed, the result shows that overall, online fraud cases have not increased in 2017, which means that some types of fraud are becoming less common. A fact hidden in the apparently positive scenario is that cyber-crime is becoming increasingly more global, with many of the victims being in a different country from the fraudster. For the first half of 2017, the rate for international fraud attacks was twice as high as the same period in 2015.
In the UK, the most common type of fraud has been identity theft. There were nearly 90,000 cases of identify fraud during the first six months of this year, representing a 5 percent increase from 2016.
“We have seen identity fraud attempts increase year on year, now reaching epidemic levels, with identities being stolen at a rate of almost 500 a day,” Cifas chief exec Simon Dukes said to The Register. These fraud cases are “taking place almost exclusively online”, Dukes added, as online crime comprises 83% of the total.
Dukes also advises merchants and companies: “For smaller and medium-sized businesses (SMEs) in particular, they must focus on educating staff on good cybersecurity behaviours and raise awareness of the social-engineering techniques employed by fraudsters. Relying solely on new fraud prevention technology is not enough.”
Figures from the Association of Certified Fraud Examiners show that nearly half of small businesses will fall victim to fraud attacks at some point, which might cost them an average of $114,000 per occurrence. The latest reports from UK Action Fraud estimated total losses to SMEs at £18.9billion.
Throughout 2017, we also saw fraud and cyber-crime becoming the most common offences in England and Wales, affecting one in ten people.
Not only are these the most prevalent crimes, but fraud and cyber-attacks have also become too widespread for police and authorities to manage, highlighting how difficult it is to track hackers moves’ and hold accountability in such cases.
Authorities are aware of only 20% of online fraud cases, which means that 60 million cases slipped through the net. Online fraud and hacking had only started to be officially measured by the police in 2015.
Hannah Nixon, managing director of the PSR, the economic regulator for the UK payment systems industry, told the Guardian: “To be successful the model must be pragmatic: consumers will need to be vigilant and protect themselves, but equally we expect banks and payment service providers to uphold best practice – and when they don’t there should be reimbursement.”
Merchants and customers must remain aware and take steps to protect their data online. Fraud takes place via various platforms, such as phishing emails, text messages, malware, fraudulent websites, phones calls and online auctions.
Secure Trading offers PCI DSS services to support your business with a cutting-edge security solution. For further advice on managing chargebacks, or to discuss your specific requirements for online payment processing and fraud protection, contact our team: Call +44 (0)808 159 7217 or email [email protected]