Early Warning Saves UK Online Retailers
£2 million and Identifies Fraud Hotspots
Early Warning, the online scheme that helps UK retailers to prevent CNP
(cardholder not present) fraud, has today announced that its member
companies have now saved a total of £2 million. Early Warning manages an
online database of known CNP fraud attempts and allows members of the scheme
to check their own CNP sales orders against this black list. Members can
also add fraudulent transactions that they discover to the database.
Commenting on the scheme's success to date, Managing Director Andrew
"We are enormously pleased to have prevented over £2 million of fraudulent
transactions going through our member companies, but this is really just the
tip of the iceberg. Online retailers need to understand three simple facts;
1. Fraudulent CNP (cardholder not present) transactions are the full
liability of the online retailer
2. The credit card companies are doing very little to address the problems
of CNP fraud
3. The police are wholly under resourced to investigate these crimes
The truth is that if online retailers don't do something to protect
themselves, then eventually they will be hit with a fraud, and that may,
ultimately, put them out of business for good."
The Early Warning fraud database now runs to several thousand entries, with
members of the scheme contributing hundreds more each month. An analysis of
the last 12 months reveals that Manchester, Coventry, Nottingham and
Paisley (in Scotland) all feature in the Top 10 Hotspots for fraudulently
delivered goods. However, not surprisingly, Greater London still represents
the single largest problem, with 6 London areas filling the other places in
the Top 10 list. By far the worst area, and Number 1 in our list is
postcodes starting with SE (South East London).
Early Warning Members are equally pleased with the data-sharing scheme;
"With the TOTAL apathy on the part of the police to investigate relatively
small fraud attempts, it's fantastic that Early Warning provides a pooled
resource where companies of all sizes can go and compare notes on fraud or
attempted fraud. The credit card companies and the payment clearing houses
actually MAKE money out of fraud (by charging the merchant if a fraudulent
transaction takes place - talk about adding insult to injury!), so they have
no interest in preventing fraud either. So where do merchants turn? Thank
God for Early Warning!"
Tiël Holdstock, Storage Depot Ltd
"I stumbled upon early-warning.org.uk when I was searching the internet for
information about a customer who I thought didn't sound genuine. I'm glad I
did. Even though a complete record wasn't showing in the system at the
time, it did have the postcode on file. I decided not to process the order
and I'm glad I did. Another search later that week indicated that more
records on this person and address had been added to the database, thanks to
early-warning.org.uk we saved ourselves a £31,500 chargeback on that one
order alone. A valuable tool in the prevention of fraud."
Ben Field, Fotofirstdirect.com
Tip of the Iceberg
CNP fraud has been growing rapidly over the past five years, with losses on
UK-issued cards reaching £110.1 million in 2002, a 15% increase over 2001.
Despite recent attempts by the card issuers to establish more secure
verification systems, the growth of CNP fraud is set to continue over the
next few years. Fraudsters are employing ever more sophisticated techniques
to catch out unsuspecting online retailers and the police are so
under-resourced that only the most serious of offences are usually
investigated. Even the much-hailed "chip and pin" system currently being
rolled out throughout the UK is likely to lead to increased CNP fraud, as
criminals find it harder to perpetrate their crimes in high street shops
and turn to online retailers instead.
Retailers need an Early Warning
Established in September 2002, the Early Warning website was established by
MD Andrew Goodwill as a direct response to the growing threat of CNP
credit-card fraud. The web-based scheme, which can be found at
www.early-warning.org.uk, is designed as a repository for bogus or
fraudulent credit card orders. Members of the scheme can check their own
online credit card orders against a database of known frauds, as well as
contributing information on frauds that they have discovered themselves.
Email alerts for all new frauds are also sent to those members requesting
In the 16 months since its inception, Early Warning UK has saved its members
from over £2 million of fraudulent transactions. The company now has
several hundred active members who have contributed thousands of known
frauds to the database. Many of these members are well-known high street
names, along with a cross-section of smaller companies and organizations.
Retailers who wish to join the Early Warning scheme must undergo an
authorization process to verify their suitability for acceptance. The
current pricing options are then available to them;
* Pay-as-you-go - £0.43 (plus VAT) per fraud search
* Basic web-based access - £59 (plus VAT) annual subscription
* Checker-based access (windows utility software) - £69.99 (plus VAT) annual
In addition, Early Warning is currently developing a "batch file" technique
that will allow a larger number of records to be checked against the
Of course with any online or CNP order the one tangible piece of information
to hand is the delivery address. An analysis of our database has led us to
identify certain hotspots throughout the UK.
Clearly Greater London represents the lion's share of the fraud delivery
hotspots, with South East London representing the single largest problem
area. The exact top 10 in order are;
1. London - SE
2. London - N
3. London - E
4. London - TW
5. London - NW
6. London - NE
7. Paisley - PA
8. Manchester - M
9. Coventry - CV
10. Nottingham - NG
Early Warning is currently seeing a significant growth for fraudulent
deliveries in the Twickenham area of Greater London, and this may be as a
result of a criminal gang operating in that area, rather than a large number
of individual fraudsters.
* Ends *
Further information can be obtained by calling Stephen Warren @ The
Marketing Exchange on 01903 203205, or by emailing
Notes to Editors
For the past couple of years Andrew Goodwill, Managing Director of Early
Warning Ltd, has owned and run a small computer parts business that takes
credit card orders via the Web. During this time Andrew became increasingly
dismayed at the volume of fraudulent orders he received, as well as the lack
of any real system to help him identify the fraudsters. In September of
2002, Andrew's response to the problem, was to launch the Early Warning
Early Warning UK Ltd now manages and administers the online repository of
known CNP frauds and makes this data available to other authorized
retailers. Early Warning develops and markets products that allow access to
this data-sharing facility. In addition, Early Warning UK is also involved
with bespoke development projects in the area of fraud prevention.
Some Other Member Comments
"Early Warning has given us piece of mind in the fight against fraud. We
use The Early Warning Scheme as well as multiple tools including additional
address checks to guarantee if an order is either genuine or fraudulent.
The more tools we have to fight against fraud the better our chances are of
reducing losses and being intimidated by this cowardly crime. Businesses
and organizations large and small can overcome and combat fraud by grouping
together, and looking out for each other. The Early-Warning Scheme allows
retailers to work as a group, fighting fraud on a scale never seen before.
We cannot rely on the Police to combat this problem; the only answer is
Paul Roberts, thecoolingshop.com
"Before I joined Early Warning I lost over £20,000 in fraudulent
transactions over a 12 month period and my business very nearly folded.
Through changing our processing procedures and using your site for almost a
year our chargebacks have been zero. What more can I say?"
Ray Betts, puterz.co.uk
Early Warning (UK) Ltd, Bognor Regis, West Sussex,
Tel : +44 (0) 870 874 4999
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