Poll: Consumers Are Turning to E-fraud

December 6, 2023

Fraud prevention provider Ravelin revealed a shocking discovery: 40% of all internet shoppers have committed e-commerce within the last 12 months.

The study polled over 6,000 adults located in the UK, France, and Germany in hopes to shine a light on the motivations and backgrounds of consumers who are turning to a life of e-crime.

AGE DEMOGRAPHIC

Surprisingly, the age demographic that has shown to be the worst offender are the adults over 45 years old, accounting for 41% of e-commerce fraud this past year, followed by 25-34 year olds (23%), 35-44 year olds (20%), and lastly 18-24 year olds (17%).

The main theory is that the cost of living crisis we are currently wading, as well as “sandwich-generation” pressures might be a driving catalyst for this behavior.

REASONS

Crime has seemed to pay for these individuals, as 13% of them have made at least €500 in the last year, and 29% say they have made upwards of €100 from their e-commerce fraud alone. When asked for comments, they admitted their reasoning is that their monetary benefit outweighs the company’s loss. 

In addition, 36% of respondents admitted they are tempted to participate in fraudulent activities in the future.

Among all of the countries listed, the French come out on top with the most shoppers admitting to first-party fraud (47%), followed by 39% in the UK and 36% in Germany.

Consumers are finding different ways to commit fraud and play the system. Mostly, they game policies by attempting to take advantage of promotions, returns or refunds so they get more than they should without paying.

Only a small fraction are tapping into second-party fraud. This is when they use someone else’s card without authorization.

IMPACT

This behavior is undoubtedly affecting e-commerce businesses in Europe. It is expected that fraud will cost merchants £39 million by 2025. This number is expected to rise.  

E-commerce fraud peaks often when consumers are shopping the most, so merchants should be wary during holidays.

According to CEO of Ravelin, Martin Sweeney, the fact that some fraud occurs during difficult times is expected, however, now we are seeing seemingly respectable, middle-aged people leaving behind their morals for the promise of financial gain though fraud, this is “quite significant”.

Merchants must be more vigilant and alert to all sources of fraud. And the best way to achieve this is to have a deeper data-led understanding of your business powered by automation. Retailers and e-commerce merchants need to balance the need to clamp down on fraud with offering customers an easy and safe shopping experience. The right automation can help merchants strike the right balance for their business.

According to the study, there’s a plethora of reasons that influence shoppers to commit fraud, from socio-economic situations to isolated life events. 51% of respondents who admitted to fraud blamed the cost of living crisis. The UK has been hit hardest, and therefore this number rises to 65%, followed by France (55%). In contrast, 37% of Germany responders blamed the cost of living crisis.

Other reasons are the pandemic (29%), unemployment (18%), having children (15%) or starting higher education (15%).

Men and women are equally to blame for these numbers, however, 38% of men say they are tempted to commit fraud in the future compared to 33% of women.

Respondents added that once they had participated in e-commerce fraud, they found it difficult to stop. 39% admit they committed fraud more frequently than previous years.

Lastly, the most frequent shoppers are the most frequent fraudsters, as 62% of respondents who admitted to committing fraud more than four times have shopped online more than 11 times this year alone. 

 

 

The cost of life crisis affects us all, therefore it is important that merchants employ systems that will guard them against the dangers fraudsters pose to their businesses.

Want to learn more? Check out Payments Cards and Mobile’s full write-up here.

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