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Festive Fraud – who bears the brunt of online shopping scams?

Sarah Small

Global Partner Marketing Manager

Sekura Mobile Intelligence Ltd

With the festive season fast approaching and the rapid rise in Covid cases due to the new Omicron variant becoming a real issue, many of us are forgoing the annual trip to the shops to pick up our Christmas goodies and are instead settling down with a Christmas tipple and a laptop to order our gifts online.


Increased online footfall is driving higher volumes of fraud

Unfortunately, the rapid rise in shopping online during the global pandemic has led to an equally rapid rise in online shopping fraud, with one in four of all fraud incidents reported during this time involving online shopping. Action Fraud reported that the year-on-year increases in online shopping and auction fraud were one of the biggest on record – up a staggering 65%.


During the Black Friday and Cyber Monday sale events last year (23 November – 6 December 2020), almost £2.5 million was lost to criminals – an average loss of almost £550 per victim.

Action Fraud


Of course, it’s not just consumers who bear the brunt of online crime. The loss to retailers of high fraud frequency can have a much more far-reaching and long-term effect on their business.


The tangible and intangible consequences of fraud

Regardless of whether a retailer has any control over the fraud being committed, the brand loyalty of the customer can be completely destroyed by their experience, creating a devastating impact on customer loyalty and ultimately the retailer’s reputation and bottom line.

With the retail sector already struggling at this time due to the mass exodus from the high street plus the labour and supply chain issues that they’ve had to face during the pandemic, it’s imperative that retailers find a way to fend off the fraudsters and protect their business, whilst creating a simple and easy customer experience. Boosting fraud prevention strategies is essential for online retail, but businesses must make sure that the user experience doesn’t become collateral damage.

Customers who are visiting your site for the first time will want an efficient, fast and friction-free checkout process – not always possible when asked mid-flow to create an account. It takes time to provide often unnecessary information, which is why almost a quarter (24%) of all cart abandonment happens when a site asks a new customer to create an account prior to making a purchase.


Take care how you address the problem, don’t make it worse

Of course, the temptation could be – in order to keep out the fraudster and protect your business – to focus purely on your service user experience, reducing the level of friction that your customers experience to keep them engaged and returning. While this could of course increase the speed of your onboarding process and drive customers to the checkouts more quickly, it could also leave your business at risk of potentially fraudulent activity and damage your customer relationships.

The received wisdom in these cases is that, in order to protect both the online business and the customer, there will need to be a certain level of verification and authentication when digitally onboarding a customer – necessary friction enabling each industry sector to meet their online security needs.

However, perhaps there are solutions at hand that can deliver a perfect win-win: secure real-time checks designed to provide seamless, trusted authentication and in-flow verification tools that can highlight potential fraud or scams whilst not interfering with the user’s flow through the service.

Mobile intelligence data can provide such a service. Using real-time API-driven data from the mobile operator, service providers can build seamless anti-fraud and account protection checks into their flow without impacting the user experience in any way.


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