Card-Not-Present (CNP) fraud is continuing to pose a real threat in UK, as British businesses were hit by card fraud every 20 seconds in March, according to Finextra.
Small businesses are those most affected and although other forms of card fraud are reportedly declining, CNP fraud, of which chargeback fraud represents a significant proportion, is on the rise. The most recent figures from the European Central Bank show that CNP fraud accounts for 60% of all EU card fraud and the figure has been rising steadily since 2008.
What makes this fraud especially concerning is that it not only leaves businesses out of pocket for fraudulently-purchased items or services, but it also has a negative impact in the long term by damaging the merchants’ reputation and credibility.
With total ecommerce revenues predicted to reach €185.39 billion for 2015 in the EU, merchants need to ensure that consumers can buy with confidence. Merchants don’t often realise the extent of chargeback fraud and the fact it can be committed by both criminal gangs and ‘regular’ consumers can make it a daunting challenge without expert help.
The 2014 Retail Security Barometer report released by Sophos, shows 72% per cent of UK retailers admit they have not implemented basic encryption security to safeguard business and consumer data. The report also highlighted that only 67% per cent of those who have fallen victim in the past have plans in place to further secure their IT system in the future.
When merchants can’t tackle chargeback claims efficiently and effectively, they leave themselves vulnerable to avoidable costs. Risk management enterprise solutions available today can give merchants the power to successfully challenge chargebacks. Once merchants recognise they can challenge and win more chargeback disputes, we can begin to turn the tide and reverse the trend in CNP fraud.
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