One of the key issues that all online businesses have to contend with is a level of fraud. With the Internet now a well established shopping environment, the levels of payment fraud have been increasing year-on-year. The Home Office’s most recent figures from the Crime in England and Wales survey states that most online payment fraud is via credit cards when ‘card not present’ transactions occur. Losses for 2021 have been estimated at £583 million, an increase of 39 per cent on 2020.
Card Payment Fraud
The latest figures released by APACS the UK payments association reveals that card based fraud has continued to increase. Total losses due to card fraud have increased by 42 per cent according to the latest statistics from 2021. Total losses now stand at £301.7 million. Of this figure more than 40 per cent is card fraud from overseas. What is clear is that as business becomes more global, international card fraud is increasing.
In addition online banking fraud also increased to a total of £21.4 million during the first six months of 2021. This equates to a 185 per cent increase on the 2020 figures. These losses were not unexpected as phishing scams have also increased over the same period. There were more than 20,000 fraudulent phishing websites set-up in the first six months of 2021 alone.
Risks to Business
Cyber-crime of which online fraud is a major contributor is a real and present danger for all E-commerce businesses. In their latest report Get Safe Online state that 44 per cent of UK businesses have fallen victim to cyber-crime. More worrying was the fact that 60 per cent of businesses in the UK that were surveyed stated that their businesses would fail if they fell victim to cyber-crime. The latest survey highlights include:
- 36 per cent of businesses surveyed have been infected with a computer virus
- 60 per cent said their businesses would grind to a halt if their IT systems failed
- Less than one third of small businesses consider themselves to be up-to-date with security issues
- An average of £1,540 is lost by small businesses during any IT downtime. This equates to £750 million in estimated losses
- Two-thirds of businesses (66 per cent) store vital documents on their PCs
Tony Neate, managing director of Get Safe Online says: “As cyber crime becomes more sophisticated, basic measures aren’t enough on their own. Businesses also must look at access control, data encryption and secure password practices, as well as looking at other measures such as staff training. But, it’s also important to remember that by taking a few simple precautions, online risks needn’t overshadow the huge benefits that the Internet brings to UK businesses.”
Online Ad Fraud
Many small businesses that use the Internet as a direct sales channel or as a marketing platform will be using Google’s AdWords. The PPC (Pay Per Click) advertising has become a phenomenon over the last few years. However, the ads themselves are online, they can be open to abuse. As anyone can click on your ads, and as your business has to pay for each of those clicks, click fraud has become a problem online. Competitors and cyber-criminals could click on your ads costing your business money that does not lead to a sale.
The level of click fraud is difficult to estimate as this differs from sector to sector. However, Google have a reporting feature within the AdWords service that monitors all Ads and reports levels of invalid clicks. Google itself states that undetected invalid clicks are less than 0.02% of all ad clicks. However, anecdotal evidence would suggest this figure is much higher.
What’s it all Mean?
Cyber-crime in all its forms is certainly on the increase. Consumers are more aware of their own vulnerabilities and have taken steps to protect themselves. The installation of anti-virus software, an awareness of identify fraud and more vigilance when using E-commerce sites have been seen in the latest statistics.
Businesses, however, are still not taking comprehensive steps to not only protect their own businesses from cyber criminals, but to also protect the data that they rely on to profitably run their enterprises. With increases in online advertising looking set to break all records this year, all businesses will need to become more aware of how their online presence could be compromised. Closely tracking online ad campaigns to spot any fraudulent clicks, better awareness of card not present fraud and more robust internal systems to protect customer data should all be top of every online businesses agenda.
