A consultancy that specialises in the prevention of credit card crime is issuing a few words of caution to Britain’s retailers ahead of National Internet Day, which takes place this Thursday. IMRG (Interactive Media and Retail Group), the organisation driving a 24-hour extravaganza fronted by TV celebrity Melinda Messenger, is hoping to convert millions of people to the joys of internet shopping by encouraging them to buy goods and services online. National Internet Day is supported by companies such as Boots, Virgin, The Post Office and BT.
However, according to the 3rd Man, a consultancy that helps retailers to protect themselves from internet and other types of ‘card not present’ (CNP) credit card fraud, many retailers need to do more to manage their risk.
“The internet has become a fabulous place to trade, but many retailers are still unaware of the potential exposure they face when trading over the web,” explains Neil Ringwood, Risk Consultant at the 3rd Man. “By using a number of different techniques, fraudsters will appear as bona fide customers but are in fact unscrupulous dupers. Not only do they avoid paying for the goods, but the retailer helps them out by posting the goods to them: it’s shoplifting with home delivery thrown in!”
Ringwood adds that consumers should not be concerned: “The IMRG are right to encourage consumers to purchase on-line. In reality the consumer has little exposure to cyber crime, it’s very much a case of retailer beware."
According to the Association of Payment Clearing Services (APACS), losses incurred as a result of fraud were well in excess of £400 in 2002. CNP fraud rose from £56.8m in 2000 to £95.7m in 2001 and has risen again in 2002 to £110.1 million. In the majority of CNP fraud incidents, the retailer taking the payment is at risk, not the bank that issued the card.
The 3rd Man, as well as other independent organisations such as The Federation of Small Businesses, British Retail Consortium and APACS, have spent the past few weeks helping to raise awareness of the issues surrounding credit card fraud. The introduction by UK banks of the new Chip and PIN scheme particularly, which is aiming to eliminate counterfeit and lost/stolen card fraud, has raised concerns regarding the likely increase in fraud on card not present transactions.
“We are not suggesting for one moment that retailers and consumers should not trade online or through interactive television, or be afraid to give credit card details over the phone,” explains Ringwood. “However, as many people as possible need to be aware that steps should be taken to reduce or indeed prevent a parallel rise in credit card crime.”
For further information about credit card crime and how to prevent it, please contact:
The 3rd Man
01483 74 28 28
For further press information, please contact:
Tel: 07812 766 338
Notes to editors
•In the past ten years we have seen rapid growth in mail order, telephone order and Internet businesses. Thousands of companies have benefited from widespread credit card usage it has never been easier for customers to purchase goods and services over the phone, through the post or via the web. In the UK, credit card usage reached an all time high in March 2003.
•Increased credit card usage has led to a parallel increase in credit card crime. Types of fraud vary from counterfeiting and the use of lost or stolen cards to Card Not Present (CNP), where transactions are made over the Internet, by phone, through interactive television, etc. Typically, CNP fraud has been harder to combat and is on the rise.
•According to the Association of Payment Clearing Services (APACS), losses incurred as a result of fraud were well in excess of £400 in 2002. CNP fraud rose from £56.8m in 2000 to £95.7m in 2001 and has risen again in 2002 to £110.1 million.
•In the majority of CNP fraud incidents, the retailer taking the payment that is at risk, not the bank that issued the card. A great deal of CNP fraud goes unrecorded by the banks as retailers bear the cost.
•The introduction by the banks of the new Chip and PIN initiative – www.chipandpin.co.uk – is expected to drive fraudsters towards CNP fraud as it is will deter and significantly reduce crime involving counterfeit and lost/stolen card crime. Unless retailers take preventative measures, they will find that CNP fraud will soon become their biggest headache.
•Other initiatives being introduced to fight credit card crime have their pros and cons, for example, slowing down the transaction process or leading to honest customer dissatisfaction.
•To avoid CNP fraud, retailers themselves need to screen all transactions carefully, either in-house or using a service provided by another company. Transactions that appear to be higher risk should be thoroughly checked before goods are dispatched
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