Over a third of all internet shoppers (40 per cent) committed fraud within the last 12 months. This is one of the shocking central findings of new research commissioned by fraud prevention provider Ravelin, exploring the attitudes, motivations, values, and backgrounds of a growing number of consumers who are turning to eCommerce crime.
Ravelin polled over 6,000 adults across the UK, France, and Germany and found that vast numbers of consumers of all ages regularly commit fraud.
Surprisingly, the over-45s are the worst offenders. 41 per cent of respondents who committed fraud in the last year were from this age group, compared to 17 per cent of 18–24-year-olds, 23 per cent of 25–34-year-olds and 20 per cent of 35–44-year-olds.
The cost of living crisis and general sandwich-generation pressures may be driving this behaviour.
This fraud seems to be paying off for many. Acting dishonestly has helped 13 per cent of those who have committed fraud gain over £500/€500 in the last year, and 29 per cent say they have gained £100/€100 or more.
Over a third (37 per cent) of people who have committed fraud in the last year believe their monetary benefit outweighs the company’s monetary loss. In addition to those actively involved in consumer fraud, many more are tempted, or tempted again: 36 per cent of respondents have considered committing fraudulent activities in the future.
French shoppers are the most likely to commit consumer fraud, with almost half (47 per cent) admitting to first-party fraud compared to 39 per cent in the UK and 36 per cent in Germany.
Consumers are finding different ways to commit fraud and play the system. Mostly, they game policies by attempting to take advantage of promotions, returns or refunds so they get more than they should without paying. A small number are pushing into second-party payment fraud, making online purchases using someone else’s card details without permission (see chart below).
The rise in consumer fraud is having a major financial impact on eCommerce across Europe. By 2025, fraud will cost merchants in excess of $48/£39 million, and this figure is set to keep rising.
This type of fraudulent activity often peaks when consumers are spending most, meaning merchants must be extra vigilant around Black Friday and Christmas.
Ravelin CEO Martin Sweeney said: “Merchants are aware they have a problem with their own customers committing fraud, but the scale to which this is happening has not been clear until now.
“We live in difficult times, so it is perhaps not surprising that some consumers find themselves tempted into fraudulent behaviour, but the fact so many otherwise respectable middle-aged people are involved seems quite significant.
“Merchants must be more vigilant and alert to all sources of fraud. And the best way to achieve this is to have a deeper data-led understanding of your business powered by automation. Retailers and eCommerce merchants need to balance the need to clamp down on fraud with offering customers an easy and safe shopping experience. The right automation can help merchants strike the right balance for their business.”
People have different motivations for committing fraud, from socio-economic to life events, according to the research. 51 per cent of respondents agree that the cost of living crisis triggered their fraudulent activity. This number rises to 65 per cent in the UK, where consumers have been hit hardest, and 55 per cent in France. By contrast, 37 per cent of respondents in Germany agree that the cost of living played a part.
Other triggers cited include the Covid-19 pandemic (29 per cent), unemployment (18 per cent), having children (15 per cent), and starting school or university (15 per cent). Men and women are equally likely to commit fraud, but marginally more men (38 per cent) than women (33 per cent) say they would consider committing fraud in the future.
Survey respondents say that once they get involved in customer fraud, they find it hard to stop. More than a third (39 per cent) admit they commit fraud as often, if not more, than in previous years.
Heavy shoppers are heavy fraudsters. 62 per cent of those who admit to committing fraud more than four times, have shopped online more than 11 times in the last year.
A majority of those surveyed find it easy to get away with committing fraud, which suggests merchants are not doing enough to protect themselves or deter consumers from being drawn into fraud.
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