E-crime costs UK retailers £205m a year - BRC

With e-commerce booming, the government and police must take the associated multi-million pound criminal threat more seriously, says the British Retail Consortium (BRC).

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E-crime costs UK retailers £205m a year - BRC

Editorial

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In a report, the BRC estimate that the total cost of 'e-crime' to retailers in 2011-12 was at least £205.4 million. Of this, £77.3 million came from actual fraud losses and the rest related issues such as prevention costs and missing out on legitimate business.

The most expensive type of e-crime for retailers was personal identification-related frauds, which cost £20 million in losses. Card fraud is in second place, with £15 million losses to retailers while refund frauds were responsible for £1.2 million.

The BRC says that, although it is harder to quantify the related losses, phishing is also a major problem for merchants, with UK brands the second most targeted in the world, after the US.

The UK has the biggest Internet spend per-capita of any nation and 11% of global online retail sales but the BRC warns that if e-commerce is to fulfil its potential in boosting the economy, government and law enforcers need to take e-crime more seriously.

Currently, there is little confidence in the state among retailers, with 60% of those surveyed by the BRC saying that it is unlikely they would report any more than 10% of e-crimes to police.

To change this, the organisation is calling for consistency on reporting, recording and investigating e-crime across the country and more police resources.

Stephen Robertson, director general, BRC, says: "Online retailing has the potential for huge future commercial expansion but Government and police need to take e-crime more seriously if the sector is to maximise its contribution to national economic growth. Retailers are investing significantly to protect customers and reduce the costs of e-crime but law makers and enforcers need to show a similarly strong commitment."

Earlier this year, the EC outlined plans to create a European cybercrime centre to help protect the continent's citizens and businesses from a threat that is thought to claim one million victims around the world every day.

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Comments: (1)

Ketharaman Swaminathan

Ketharaman Swaminathan Founder and CEO at GTM360 Marketing Solutions

Fraud Loss: GBP 78M. Revenue Loss: GBP 127M (205 - 78), arising from "false positives" in the fraud detection and prevention technology. These figures confirm my perennial hunch that current security technologies are afflicted with so much friction that they cause more loss than they prevent. No wonder not a single US e-tailer I've come across uses VbV or an equivalent 2FA mechanism for CNP transactions.

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