Inadequate police response means many businesses see reporting crime as a waste of time
The British Retail Consortium (BRC) has called on the Government and police to take online crime more seriously following a report that shows web fraud retailers millions every year.
A study by the BRC found most of the online crimes retailers suffered originated in the UK and put the loss to these companies at more than £205 million each year. But the figure could higher as many crimes go unreported.
Stephen Robertson, director general of the BRC, said: "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."
A recent report from CIFAS showed that 83 per cent of fraud is now carried out online. The BRC study, which took reports from 45 per cent of the retail sector, including supermarkets, department stores, and mixed retail is the first into online crime published by the trade body.
It looked at both the direct and indirect costs associated with computer crime, including lost revenue from honest customers deterred by additional security measures.
The report estimates that in 2011-2012 retailers lost 0.75 per cent of all sales due to online crime; a loss of £205.4 million from total sales of £28 billion.This is twice what is lost from all retail sales – 0.36 per cent of the total of £303bn.
But the study also found that six in ten online retailers surveyed as part of the study said it was "unlikely" that they would report any more than 10 per cent of online crimes they had suffered because police don't take the crime seriously enough.
How retailers lose money
The most prevalent fraud for retailers according to the BRC report involved identity theft, costing retailers £20m in 2011-12. This is when a criminal hijacks someone's identity or bank account to carry out the crime.
Card fraud cost retailers £15m. This is usually when another person's debit or credit card has been stolen or cloned to pay for purchases. Another problem for retailers is 'refund frauds'.
This is when the customer dishonestly claims that their purchase has never arrived or damage goods in order to get a refund. This crime accounted for an additional £10m worth of losses.
Phishing websites were also a problem, but although the BRC said the losses were harder to quantify it said these attacks could cost as much as £2m.
Reporting online crime
This according to the BRC is a huge problem for retailers. There is no single point of contact with the police such as there is for conumers and small businesses through Action Fraud.
Only 14 per cent of retailers who had reported an ecrime were happy with the help they received. Most claimed the police didn't view e-crime as a "priority".
A BRC spokeswoman said: "There is a real difficulty for retailers when trying to report online fraud or other ecrimes. Do they go to their local police, or do they go to the police where they believe the criminal is located?
"If retailers report to their local police and they have no expertise then they are passed on to another force. Also the individual figures involved in many of these crimes are too small for the attention of specialist units such as the Met's Police Central e-crime Unit or the City of London police, which is the national lead force for fraud."
Robertson said that the authorities should develop a consistent, centralised method for reporting and investigating e-crime and ensure sufficient resources were directed to tackle the "emerging threat."
"This will encourage retailers to report more offences and allow the police to better identify and combat new threats," he said.
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