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BizReport : Ecommerce : October 09, 2014

British retailers pool data to fight fraud

A new fraud and loss prevention coalition has been formed in the UK managed by anti-fraud specialist Transactis. The data sharing platform aims to improve retailers' ability to identify potential fraudsters across multiple customer touch points.

by Helen Leggatt

Transactis's scheme, called The TRADE Scheme, has come about due to the growth of fraudulent goods lost in transit (GLIT) claims among online retailers. The platform will enable retailers to share real-time consumer data that will enable the flagging of suspect transactions and customer claims including false reports of lost deliveries and returns.

The scheme uses data from individual customers and addresses, along with data matching techniques to detect fraudsters using multiple identities across several organizations, as well as other tactics used to mask dishonest activities.

"There is a very narrow window for a retailer to review an order and decide what action to take," says Dave Webber, product and professional services director at Transactis. "Not only is there the relationship with the customer to consider - for instance, the retailer can't just wait and see what happens if a delivery goes missing - but there is the cost that further investigation would entail, so there is a real need for the company to have relevant information that enables it to quickly and efficiently assess a situation and prioritize the use of its resources."

A recent survey, carried out by consumer insight and data analysis firm Transactis at a Retail Fraud Conference organized by Retail Knowledge, found that more than 90% of loss prevention professionals believe "data from other retailers about losses due to opportunist fraud would be valuable to those seeking to prevent all types of fraud against their own organization".

Additional findings from the survey include:

- 13% of loss prevention specialists believe retailers can distinguish between legitimate and false GLIT claims without alienating genuine customers;

- 19% believe retailers have in place a defined process to record and track all GLIT claims;

- 44% of loss prevention specialists see retailers utilizing claims histories in their anti-fraud processes; and,

- 31% believe retailers are aware of the gross margin loss caused by GLIT claims.

"Previously, we've had to rely on data developed for use by financial institutions, which does not fully address the very specific cyber threats that online retailers are facing today," says John Pears, director of credit risk and operations at Shop Direct. "TRADE will add a new, universal layer of fraud data that will enable retailers to identify these threats more effectively and reduce fraud losses as a result."

Image via Shutterstock

Tags: fraud, loss prevention, retail, UK

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