Shoppers spent 4.2% less in stores this year over Thanksgiving weekend, according to RetailNext.
Online fraud losses more than doubled in 2009, with scams related to online retail contributing to the problem, according to a report from the Internet Crime Complaint Center, a partnership between the FBI and the National White Collar Crime Center.
Online fraud losses more than doubled in 2009, with scams related to online retail contributing to the problem, according to the latest annual report from the Internet Crime Complaint Center, a partnership between the FBI and the National White Collar Crime Center.
Consumers lodged 336,655 complaints with the center in 2009, up 22.3% from 275,284 in 2008. Losses linked to those complaints increased 111.2%, to $559.7 million from $265.0 million in 2008. E-mail scams in which criminals pretended to be from the FBI in order to steal personal information from the victim represented 16.6% of the complaints, the largest single category of complaints.
The second-largest category involved non-delivery of merchandise or payments, accounting for 11.9% of complaints. Scams related to identity theft accounted for 8.2% of complaints in 2009. Misuse of credit cards accounted for 6%, while scams linked to online auctions accounted for 5.7%, the center says. Such crimes should concern online retailers, says John Kane, research manager for the National White Collar Crime Center.
“Retailers are often the ones left holding the bag on chargebacks related to fraudulent use of someone’s account,” he says. “Online retailers can also suffer reputation damage associated with phishing and similar scams due to their name or likeness being used to trick people out of personal and financial information.”
The annual report does not quantify the fraud losses specifically absorbed by online retailers. “We can say online retailers are paying a price in many of these schemes, and as the total number of identity theft and credit card fraud cases continues to rise, this price is undoubtedly rising as well,” Kane says.
A type of fraud gaining popularity as the economy continues to limp along involves criminals buying merchandise with stolen credit card numbers, he says. After receiving the goods, the criminal ships the merchandise overseas.
“One of the areas we are looking at right now from a research standpoint is if being ripped off by online retailers is starting to erode public confidence in shopping online,” Kane adds, noting that he uses the term “online retailer” loosely because fraud often involves bogus companies posing as legitimate retailers.