Retailers act to stop online fraud

shutterstock_212773753Retailers are working together to overcome online fraud in a new coalition known as ‘Trade’.

The fraud and loss prevention tactic hopes to detect fraudulent activity as it happens and speed up subsequent actions by sharing transactional data. QVC and Shop Direct as well as other big retailers are part of the scheme managed by Transactis, consumer insight and anti-fraud specialist.

Notes John Pears, director of credit risk and operations at Shop Direct: “TRADE has been put together with input from retail players that really understand the impact of fraud and the need for a loss prevention platform that addresses the challenges they face each day. The retail industry – especially the companies involved in ecommerce and other forms of home shopping – needs a system that takes this type of loss prevention to the next level.”

He adds: “Previously, we’ve had to rely on data developed for use by financial institutions, which does not fully address the very specific cyber threats that online retailers are facing today. TRADE will add a new, universal layer of fraud data that will enable retailers to identify these threats more effectively and reduce fraud losses as a result.”

The group of retailers signed up to ‘Trade’ will be able to view behavioural information to establish a consumer’s trading record and improve their ability to spot potential fraudsters in action. Risks being addressed include, identity theft, no intent to pay and a false goods lost in transit (GLIT) claim. The scheme draws on both individual consumer data and address data to seek out the fraudsters using multiple identities across several organisations as well as other tactics the dishonest buyers might try.

Dave Webber, Product and Professional Services Director at Transactis, explains:  “There is a very narrow window for a retailer to review an order and decide what action to take. Not only is there the relationship with the customer to consider – for instance, the retailer can’t just wait and see what happens if a delivery goes missing – but there is the cost that further investigation would entail, so there is a real need for the company to have relevant information that enables it to quickly and efficiently assess a situation and prioritise the use of its resources.”

Martin Spencer, Finance Manager of QVC UK, comments:  “Best practice and doing things the right way – for both the business and the customer – depends on having the right tools to tackle retail fraud. TRADE provides a new and essential instrument for doing this, providing a ground-breaking means of cutting down losses arising from first-party fraud against retailers engaged in ecommerce. It is a solution that the whole sector could pick up on – to everyone in the industry’s advantage.”

He concludes: “Companies in the retail industry have not really worked together before to deliver a collective anti-fraud service that covers both card and credit transactions, so TRADE is providing a real opportunity for a level of information-sharing that has not previously been possible. This will not only ensure quicker and more effective fraud screening, but it will mean that we and other TRADE members can do a better job of making sure genuine customers get the best possible service.”