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BizReport : Ecommerce archives : January 23, 2013

E-crime a more costly retail crime than shoplifting

The cost of e-crime in the UK, including the value of stolen goods, damage incurred and crime prevention measures, has risen to such an extent that the British Retail Consortium says it is now a more costly retail crime than shoplifting.

by Helen Leggatt

british_retail_consortium.jpgThe British Retail Consortium's (BRC) Retail Crime Survey 2012 (.pdf) found that the cost of retail crime in the UK rose by 15.6% in 2012, to £1.6 billion ($2.5 billion). Of that, a whopping 37% was as a result of e-crime. By comparison, 28% of the total losses from retail crime came from shoplifting.

Overall, e-crime cost the retail sector £205.4 million ($325 million) last year. That figure includes £77.3 million ($122 million) in losses from identification-related fraud including account takeovers (£20 million / $31.6 million), card-related fraud (£15 million / $23.7 million) and refund frauds (£1.2 million / $1.89 million). Also included are the costs of putting in place better systems and security measures to protect customers from e-crime (£16.5 million / $26 million).

However, the biggest losses were as a result of legitimate orders being rejected due to online fraud prevention measures, estimated to be around £111.6 million ($176.6 million).

Although more sophisticated attacks like phishing or hacking are often carried out by perpetrators from outside the UK, retailers questioned in this survey suggested that the majority of frauds continue to be perpetrated domestically. Retailers reported that around 86% of attacks originate within the UK.

The survey also delved into levels of satisfaction with current police responses to retail e-crime. Respondents highlighted a number of concerns and levels of satisfaction were low. Over half said they were dissatisfied with current responses and more than a quarter expressed strong dissatisfaction. Just 14% indicated they were very satisfied with police support.

"The reason for such low levels of reporting and satisfaction was that e-crime is not considered to be a priority by many police forces," says the report. "There were also concerns that national units such as the National Fraud Intelligence Bureau or the Police Central e-Crime Unit (PCeU) do not have the resources or capacity necessary to carry out further investigations."

Consequently, levels of reporting of e-crime to law enforcement are low. Sixty percent of retailers surveyed said they would be unlikely to report any more than 10% of e-crimes to the police.

Tags: e-crime, fraud, retail, UK

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