By Elizabeth Kerr, Financial Content Specialist
Fraudulent internet shopping transactions are a widespread occurrence all over the world. A global survey reveals that internet shopping scam victims are losing money faster than in the past. Indeed, the number of clients who suffered losses after being deceived by online scammers grew at the onset of Covid-19. However, as per a Banklesstimes.com analysis, the percentage of online shopping scam victims losing money is down to 74%, from 78% in 2020.
Commenting on the data, this is what Banklesstimes.com’s Jonathan Merry said: “The number of victims is reducing. The restoration of normalcy after Covid-19 might be a factor.” He went further to hint that retailers might also be heightening their alertness. “Retailers are also cautious, thus making it difficult for fraudsters to pull off their scams.”
The emergence of E-commerce has increased the possibility of fraudulent activity. A surge in online transactions occurred due to the COVID-19 crisis. The pandemic presented con artists with a brand new opportunity to scam users. About three-quarters of online traders globally have reported a net increase in fraud attempts since 2019.
Then (2019), the industry experienced a wave of security breaches. It lost an estimated 20 billion U.S. dollars that year due to fraudulent online payment systems activity. Consequently, it gave rise to the market for detecting and preventing fraud in online commerce. BanklessTimes expects that market to approach $70 billion by 2025.
Maintaining vigilance to curb fraud from far
In 2021, online retailers worldwide experienced a variety of fraud schemes. But the “friendly fraud” scheme was by far the most prevalent. Clients were buying goods online and then filing claims with their banks, claiming the sales did not occur. They did this to get their money back fraudulently.
Countries in Latin America and Asia-Pacific had the highest fraudulently accepted online orders. These targeted unknowing online retailers.
Due to the presence of online fraudsters, the online retailers’ urge to manage these attacks has never been higher. So far, more than nine out of 10 entities believe that they must work on E-commerce fraud to enjoy success.
Besides, more online firms feel that their skills against assaults on E-commerce have increased over that year. More than a third of them say they could recognize attacks sooner.
Dealers have sought the usage of the card verification number and email verification to detect fraud. Both of these tools have proven essential in this regard.
Scam affects the client’s experience
If retailers have felt the financial impact of cybercrime, then clients are not far back either. In recent years, the percentage of victims of online sales schemes who lost money has not gone below 70%. This percentage has remained relatively constant.
This scenario might harm retailers’ brands and the faith that clients have in them. In 2021, less than 40% of clients in the US, Germany, the U.K. and France expressed confidence in the capacity of traders to avoid fraud in online commerce.
Despite all these difficulties, there is still cause for hope. Offering safety from scams could be a stimulant for people to use e-commerce more. However, eight out of ten clients in the U.S. would increase their frequency of online purchases if they had insurance against this risk.
About the author
Elizabeth Kerr is a financial content specialist from Manchester. Her specialities include cryptocurrency, data analysis and financial regulation.
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