How We Manage Online Fraud
At Luxx we have zero tolerance with online fraud.
Buyer fraud online has grown at an alarming rate over the past few years. Here are some sobering statistics from a 2017 report on the topic.
- Online shopping fraud increased 30% in 2017, a more significant increase than ecommerce sales.
- Ecommerce fraud grew by 45% in 2017. This cost retailers almost $58 billion.
- ID theft is on the rise, which has also cost consumers over $16 billion in 2017.
- Credit card chargeback rates increase almost 20% annually, accounting for just under $7 billion in lost revenue in the form of merchandise, fees, and sales.
As you can see, online fraud is a massive and growing issue. Ecommerce sellers are losing billions of dollars a year to these scams, and that number is on the rise as retailers struggle to keep up with the crooks.
Methods of fraud are not limited to credit card fraud, but include fraud such as 'Item not received' to try to obtain free goods, or micro-aggression to obtain refunds for 'missing goods' that have been delivered, refusal to pay VAT and demand refunds, file false chargebacks, issuing false delivery address to demand refunds for 'not received' deliveries, and many more. These are all illegal methods that constitutes online fraud and are criminal offenses.
How We Deal With Fraud
We deal with fraud on a regular basis. The patterns of fraud have common key signs that ecom sellers can detect after years of experience, and by additional guidelines from payment processing providers.
Due to growing concerns of fraud we have more stringent measures in place dealing with missing items complaints than previously:
- Reporting incident to the police
- Reporting suspected postal fraud to Royal Mail (RM can file criminal charges for postal fraud)
- Falsified chargebacks for rejected VAT and Import fees are sent to collection services with additional administration fees of a minimum £500+ for legal processing and costs.
- Falsified chargebacks may be filed with county courts (small claims) complaint to recover the fees plus administrative fees of a minimum £500+ legal processing.
You can help us tackle online fraud. We are there 100% for our customers, but it's helpful to understand the circumstances we deal with. Provide as much information as possible to help us navigate fraud versus authentic cases, don't expect us to pick up the tab for your address mistakes or refusals to pay VAT. In this way we can all avoid pitfalls that can lead to police complaints.