Online payment fraud more than doubled in the six weeks from the beginning of October, as criminals geared up to take advantage of the surge in bargain-hunting during the Black Friday period and in the run-up to Christmas, research found.
The average daily rate of UK payment fraud — the number of attempted frauds as a proportion of overall transactions — was up by 117 per cent between October 1 and November 15 compared with the average daily rate this year, according to data from Sift, a digital security company.
This fraud rate was also 385 per cent higher than in the same period last year, suggesting criminals were looking to capitalise on the huge growth in online shopping experienced during the Covid-19 pandemic, as activity at bricks-and-mortar stores has been severely curtailed under lockdown restrictions.
The fraudulent payments measured by Sift, which protects transactions on 34,000 sites or apps globally, were identified as using stolen payment information and blocked by the security company.
Tonia Luykx, head of Sift’s Europe business, said the online retail season had been bigger and had extended for longer this year because of the pandemic, giving fraudsters more opportunity to “hide in the crowds” during the period of high volume. “Everyone is shopping online, because there is little alternative,” she said.
Black Friday’s official date is tomorrow, but many companies have launched earlier deals this year, while others have increased their promotional activity over the period. Online retailer Amazon said its two-day Amazon Prime Day sale — which took place in the UK in mid-October — had driven record sales for small- and medium-sized retailers on its site globally.
The lucrative Black Friday promotion, when retailers slash the price of goods to drive sales, attracts criminals posting fake advertisements for goods or posing as trusted brands. The goods are never received, but the victim has handed over personal information or sent money electronically. Barclays this week said shopping scams made up 44 per cent of overall scam claims reported to the bank, while UK Finance, the banking lobby group, said the average loss per case in the first half of this year was £720.
UK Finance added that scammers were exploiting seasonal shopping demand by advertising things featured on Christmas wishlists, such as games consoles, bicycles and clothing, or those related to lockdown measures, including patio heaters and sheds.
Which?, the consumer group, said it was possible for victims of payment fraud in many cases to get their money back. Using a debit card may mean the transaction is covered by the chargeback scheme, which applies to goods under £100, although rules may vary depending on the bank or card provider.
For goods over £100 bought with a credit card, customers have greater protection under Section 75 of the Consumer Credit Act. If the goods were never delivered, customers can make a claim for the money to their card provider.