Reports: Fraud a concern for merchants, brands
That would be an increase of about 18% YoY, much brought about by fraudsters who are targeting consumers who aren’t as savvy at protecting their financial information in the digital space. To staunch the flow – and to protect their shoppers, Juniper’s experts believe digital merchants must up their fraud prevention strategies across the ecommerce space, utilizing AI to spot potential fraudsters before damage can be done.
Juniper’s researchers have developed an online guide to help retailers fight online payment fraud. It can be accessed here.
“A wave of inexperienced consumers began digital shopping, banking, and payments in 2020, creating an irresistible pool of victims for fraudsters to attack. We expect that trend to continue through 2021,” said Andy Renshaw, VP of payment strategy & solutions, Feedzai. “With more people doing business online, fraudsters simply have more opportunity to steal data and commit fraud. Our own research showed that 70% of all fraud was driven by card-not-present transactions in 2020–meaning online transactions make up the vast majority of fraudulent activity, driving this expected $20B impact. In order to curb the rise in fraud, we need both consumers and financial institutions to increase their vigilance for fraud, get educated on safe online practices, and invest in technology to fight financial crime.”
Meanwhile, data out from Incopro indicates that about 20% of fake ecommerce listings are coming from 3% of illicit sellers – and that getting these sellers shut down could save consumers and brands up to $78 billion per year.
To shut these sellers down, Incopro believes online marketplaces must do two things:
1. Require all sellers become verified
2. Employ a one-strike policy in which sellers are banned if found to be selling fake more than three times
“With the pandemic driving an accelerated shift to online retail, it is critical that more is done to protect brands and consumers,” said Simon Baggs, CEO and co-founder of Incopro. “We are seeing huge increases in brand misuse, a trend which has already caught the eye of legislators in the United States and Europe. I hope this study will inform and accelerate legislative change, driving a consistent approach to seller verification and sanctions for repeat illicit activity.”