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Returning worn items and faking stolen packages: Consumer fraud is on the rise

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Returning a used or counterfeit item, pretending a safely delivered package has gone missing or arrived damaged — they’re all examples of “friendly fraud”, meaning a brand’s customers are defrauding them. And it’s a problem on the rise, raising alarm bells for brands and retailers.

Fraud prevention platform Ravelin recently surveyed more than 6,000 adult online shoppers in the UK, France and Germany, finding that 40 per cent have committed fraud in the last 12 months. Consumers over 45 are the biggest culprits, mainly because they don’t recognise their actions as criminal. Almost half of French respondents (47 per cent) admitted to committing fraud, compared to 39 per cent in the UK and 36 per cent in Germany.

By 2025, fraud will cost sellers upwards of £39 million, according to Ravelin. Fraudulent activity comes to a head during peak sales season, so with holiday shopping promotions on the horizon, retailers should be vigilant, the report says.

“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,” says Ravelin CEO and co-founder Martin Sweeney. “We live in difficult times, so it is perhaps not surprising that some consumers find themselves tempted into fraudulent behaviour.”

The cost of living crisis is a leading factor in why fraud is on the rise, according to the survey, with 51 per cent of respondents agreeing that it has triggered their fraudulent activity. This skews higher in the UK at 65 per cent, where consumers have been hit hardest, and France at 55 per cent, compared to 37 per cent in Germany.

Other factors cited include the pandemic (29 per cent), unemployment (18 per cent), having children (15 per cent), starting school or university (15 per cent) — all times where pockets are pinched. Heavy shoppers are most likely to commit fraud, with 62 per cent of those who admit to commiting fraud more than four times having shopped online more than 11 times in the past year. According to Ravelin, dishonest activity has helped 29 per cent of fraudsters to gain more than £100 in profits the last year, with 13 per cent gaining over £500 — and 37 per cent of people who committed fraud believe their monetary gain outweighs the company’s loss.

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