CRIF AG carried out a fraud survey on Swiss online and mail order companies, in collaboration with the HANDELSVERBAND.swiss trade association.
Over 85% of all the traders questioned declared that they had been affected by fraud at least once. 25.7% reported either an increase or even a sharp increase in fraud attempts in 2020. For 68.6% of those questioned, nothing much had changed in this regard since the previous year.
Increase in the amounts lost
The majority of those questioned, 56.3%, estimated that their maximum loss in the past 12 months would have come to under CHF 5,000. Nevertheless, individual losses of between CHF 10,000 and CHF 50,000 had risen by 16.2% in comparison with 2020.
The forms of fraud facing online traders
The form of fraud most frequently encountered involves those who order goods even though they know in advance that they cannot pay for them, together with those who buy goods using forged details or an alternative identity. An increasing number of fraud attempts also involve customers who dispute that they have ordered goods at all.
More and more traders are working with external service providers in the fight against fraud
Almost 83% of the traders we questioned stated that they implement fraud detection procedures. About half of them (54.3%) manually check for any suspicious orders. A variety of blacklists and fraud filters are also popular in the fight against fraud. In 2020, 4.8% of traders indicated that they used external service providers to implement fraud prevention measures, but this proportion rose to almost 23% in 2021.
Two thirds of respondents stated that the number of fraud attempts had fallen, thanks to the use of fraud detection methods.
Higher revenue thanks to the pandemic, but fraud attempts have also increased
Over 88% of those questioned stated that their online stores generated more revenue because of the pandemic. However, they also became prey to more fraud attempts (17.1%).
Fraud can affect any trader
Patrick Kessler, President of Handelsverband.swiss, confirmed that any online trader can be affected by fraud: “Any easy opportunity will tempt thieves – and any online trader who fails to implement fraud prevention methods will fall victim to fraud sooner or later. It’s therefore very important to carry out company-specific checks, but it’s also vital to implement fraud prevention methods using professional service providers who can quickly detect fraud patterns that go beyond the trader’s own sector, and thus prevent any losses.”
Daniel Gamma, Head of E-Commerce at CRIF, added that: “We’re getting far more enquiries about fraud prevention solutions. However, store operators are often astonished at the wide variety of options on offer for fraud protection. In particular, it’s still not well-enough appreciated that you can outsource the entire fraud prevention process to an external service provider.”