‘E-crime’ costs retailers £205 million in a year

E-crime is the biggest emerging threat to the retail sector as the rapid growth in ecommerce in the UK sees new ways of shopping being accompanied by new types of crime.

That’s the conclusion of the British Retail Consortium’s e-crime report, the first comprehensive assessment of the make up and scale of e-crime.

It estimates the total cost to retailers in 2011-12 was at least £205.4 million, which includes £77.3 million in losses from fraud as well as prevention costs and legitimate business lost as a result of those measures.

The most expensive type of e-crime for retailers was personal identification related fraud. This accounted for £20 million of losses in 2011-12.

Card fraud was in second place, with £15 million losses during the same period.

Refund frauds were responsible for £1.2 million in losses.

Retailers also lost £111.6 million as a result of genuine business being rejected because of crime prevention measures. For example, honest customers may be deterred from continuing with a purchase by additional online security measures.

The BRC study also highlights that many retailers lack confidence in the official response to e-crime.

Of those questioned, 60 per cent said it was unlikely they would report much more than 10 per cent of e-crimes to police.

“The rapid growth of e-commerce in the UK shows it offers great benefits for customers, but also new opportunities for criminals,” says British Retail Consortium director general Stephen Robertson.

“Online retailing has the potential for huge future commercial expansion, but government and police need to take e-crime more seriously if the sector is to maximise its contribution to national economic growth.

“Retailers are investing significantly to protect customers and reduce the costs of e-crime, but law makers and enforcers need to show a similarly strong commitment.”

Robertson adds: “This first comprehensive survey assessing the make up and scale of e-crime shows where efforts need to be directed.

“Law enforcement and the government need to work with us to develop a consistent, centralised method for reporting and investigating e-crime and resources must be directed to e-crime in line with the emerging threat.

“This will encourage retailers to report more offences and allow the police to better identify and combat new threats.”

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