One in four (23%) Brits have been victims of fraud when shopping online – with 8% duped more than once, according to the inaugural Shieldpay Fraud Tracker.
The cost of online scams is significant. Those which were tricked whilst purchasing an item online lost £608 on average – with one in seven (14%) victims defrauded by more than £1000. When looking at the difference between women and men, the cost of fraud is higher for men – incurring a loss of £139 more.
Banks are facing increased scrutiny about how they protect customers from scams. Yet the research shows they may not be doing enough to protect victims. While two in five (37%) victims received the full amount back from their bank or payment provider the average amount recovered was just £55, leaving the typical person £553 out of pocket. One in eight (12%) victims received nothing at all.
While online fraud has not deterred victims from online shopping altogether, a vast number (48%) have since changed their behaviour. 31% will only buy low value items, 10% do it when it is the only option available and 5% no longer make payments online.
The rise of online marketplaces, such as Facebook Marketplace, Gumtree and Shpock, has supported a rapid rise in people buying and selling items online. However, 50% of Brits are wary of sending money directly to a seller, highlighting the need for a more secure way to transact. Consumers are happier to pay for popular lower value items listed on marketplaces such as clothing (27%), books (25%) and furniture (16%), but when it comes to items of greater value like buying a car (7%) or antique (9%) people are less confident to send money directly to the seller.
Shieldpay’s transparent payment solution mitigates the risk of fraud by verifying the identity of all parties, holding funds securely and only releasing funds when all sides agree they are happy.
Peter Janes, founder and CEO of Shieldpay, said: “Banks, businesses and consumers all have a role to play in taking every possible precaution against fraudulent activity online. With scams rampant, however, this is easier said than done.
“More responsibility needs to be taken by banks and businesses in protecting customers online, adoption of technology is one solution that can help to eliminate the risk. Consumers can also ensure they do not become a victim by engaging in safe practices when shopping online. Shieldpay’s digital solution is an industry game changer that equips banks, businesses and consumers with all the tools they need for a secure transaction, mitigating the risks involved in online purchases.”
To see how Callsign are tackling fraud using biometrics, read; Fintech: How Banks Can Use Intelligent Biometrics to Reduce Customer Fraud