New research conducted by fraud prevention provider Ravelin has uncovered alarming insights into consumer attitudes towards fraud, claiming that over a third of all consumers believe it’s acceptable to commit fraud against brands.
The report, titled “The dark side of online shopping – the rise of friendly fraud,” revealed that 37% of internet shoppers view committing fraud against brands online as entirely acceptable.
Ravelin polled over 6,000 adults across the UK, France, and Germany and concluded that vast numbers of consumers of all ages regularly commit fraud.
A quarter (25%) of the surveyed even believe that fraud against these brands is a victimless crime, and 27% think fraud helps level the playing field against companies with inflated prices.
Surprisingly, 16% of respondents see friendly fraud as a legitimate way to cope with the cost of living crisis, while 17% express no concern about being caught. The report also highlights that almost a third (32%) believe that celebrities and online influencers actively encourage this type of behaviour.
Despite these brazen attitudes, a significant portion of those surveyed firmly believes that friendly fraud is wrong and should be penalised. Nearly half (48%) advocate for harsher punishments, and 27% believe publicly naming and shaming perpetrators would help curb fraud.
Interestingly, the research indicates that 52% of consumer fraudsters themselves acknowledge that dishonest behaviour contributes to higher prices for everyone. However, a quarter (22%) argue that brands make it too easy to exploit their systems.
The study managed to identify certain merchants as more susceptible to consumer fraud, with large supermarkets being the most targeted (39%), followed by high-street brands (29%) and food delivery apps (19%). In contrast, purpose-driven brands and social enterprises face lower risks, targeted by only 6% of consumer fraudsters.
To bring consumer fraud under control, half of those surveyed believe additional checks and security measures at checkout are essential. A quarter suggests improved processes around vouchers and returns, while 48% advocate for harsher punishments. Additionally, 22% believe better communication from brands and blacklisting offenders could serve as effective deterrents.
Ravelin CEO Martin Sweeney commented on the findings, stating, “We’ve been taken aback by quite how brazen some people are in their attitudes and behaviours when it comes to friendly fraud. It’s telling that a significant proportion of fraudsters think retailers themselves enable the practice.
“Retailers must strike a delicate balance between facilitating sales and minimising fraud risks, but it’s clear from our findings that many don’t get it right. One size fits all fraud approaches need to be replaced with data-driven approaches that learn and evolve in response to new patterns of behaviour.
“It’s positive to see that many consumers are open to the idea of more checks and security to reduce the impact of friendly fraud. For brands, the challenge is implementing these measures while keeping the customer experience as frictionless as possible.”
Copyright © 2024 RegTech Analyst
Copyright © 2018 RegTech Analyst
