Retail fraud teams to grow amidst surge in online fraud

Retailers are increasing their fraud teams and budgets due to a marked rise in online fraud during the pandemic, according to research by Ravelin.

The fraud detection and payment acceptance company found that 72 per cent of retail brands around the world expect to grow their fraud team in the next year.

A further 76 per cent predict their budget to tackle fraud will increase in the next 12 months, with one in five expecting a “significant” increase.

The company said that the focus on fraud detection has been driven by surges in online payment fraud, account takeover, refund abuse, and promotion abuse, which has been triggered by a vast shift to e-commerce.

Almost 40 per cent of fashion and FMCG retailers see online payment fraud as their biggest fraud risk, while refund abuse, where consumers wrongly claim they never received a product they ordered online, has increased for half of retailers.

Account takeover, often the result of password reuse across multiple retailers, has also risen for 45 per cent of retailers in the past 12 months.

“The conditions of the pandemic have created a veritable petri dish for the growth of fraud,” said Mairtin O’Riada, co-founder and chief information officer, Ravelin. “Retailers are scrambling to drive ecommerce and are handling extremely high volumes of transactions online, while also trying to fulfil a growing number of online deliveries. At the same time, honest consumers and avid fraudsters are feeling the pinch of a shrunken economy — many have lost their jobs and money is tight.”

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