The Truth about Cyber Fraud
Card fraud is a problem. But the Internet is not the
problem. On two separate occasions recently my sister was called by her card
supplier at her office in Oxford to check if she had just spent thousands in
an Athens jeweller or recently indulged in some psychotic shopping therapy in Mexico
City. In both cases the answer was no. What she had done was use her
card to pay for a meal in both locations in previous weeks.
According to the figures in the
APACS website, about 5.4% by
value of total card transactions were fraudulent (although
recent figures are hard to find). In the UK, plastic card fraud
losses cost banking and retail £292.6 million in 2000. But estimated
losses from Internet and telemarketing transactions were only £7
million. The Sunday Times commented: ‘The spectre of online fraud is a
myth.’ Only a very stupid thief would give an accurate delivery address for
the ticket or goods they have ordered, which is normally a vital part of completing a
sale over the web.
Another myth is that it is easy to set up a web shop-front and start
taking orders. In fact there are a couple of days of form filling, followed by a long
wait before you are authorised to accept card payments. If you wanted to collect money for
goods that don't exist, it would be much
easier to stick an advert in the paper offering bogus goods.
When you pay your money over the net, the trader does not
even get to see your card details, unlike the shop or restaurant. A handful of
banking organisations act as the secure intermediaries between the trader and the customer. To make absolutely sure the
goods are delivered, these bankers then hold your payment hostage for days or
weeks before passing it on to the trader. In
terms of customer security it is an excellent system. Consequently levels of Internet
fraud by traders are low.
Pity the honest trader. Not only do they not get their
money for perhaps a month, they then pay an large commission but have no recourse if
it turns out that the customer was using a stolen card. It is actually the
cyber traders who should be a bit fussy about their customers!
Rumour has it that Internet card fraud scams concentrate
on
the 'adult' sector, where customers are unlikely to complain, allowing the crooks
to get
away with it. Remember it was the blue-movie that is credited with making a market for
VHS
videos.
So next time you come across someone leaning against the
bar telling you about how 'a friend of his' was ripped off when he tried
shopping on the Internet, perhaps you are talking to another disappointed
'adult'.
The Internet takes the blame for every out-of-stock or mis-delivery. If someone is mug enough to send a cheque to someone auctioning
off the contents of their house, it is not fair to blame the messenger, but it
does make a good story. The rules of trade have not altered with the arrival
of Internet trading. The people at both
ends of any deal must trust each other. And when it comes to paying on the
Internet your money is remarkably safe.
PS Many of our customers still prefer to pay
by cheque or send us their details to process. Check
the payment pages.
