Last week the British Retail Consortium revealed that retailers had actually spent more trying to prevent ecrime than the cost of crime itself. Is the current approach really best?
How many different passwords do you have? If you’re anything like me you’ll have more than you can remember, and every time you’re faced with that little blank rectangle your mind goes blank. Frequently I end up being locked out of my account – and this invariably means I don’t buy.
Turns out I’m not the only one: retailers last year lost more than £111m from “legitimate business” being put off by their e-crime prevention. That figure is conservative according to the British Retail Consortium, and does not include the numbers of people who having been blocked or lost in the past have simply given up even trying.
It’s not just passwords that are the problem – among the more over-zealous security measure the Drapers team has come up against are indecipherable captchas and all-too-quick timed locks.
So what can retailers do about it? Certainly some measures are needed – BRC reports that £77m was lost through ecrime last year, estimating that security reduced this total by a third – but when you look at the sums, it’s remarkable that more business is being scared off than is being defrauded.
One solution lies in the BRC’s call for government and police to get more involved in the matter. The association’s crime policy adviser Catherine Bowen has called for a centralised database that can be used across industries to inform businesses of emerging trends, as well as repeat offenders.
It seems crazy that companies are trying to solve a problem when so little data is collated and assessed – but the real change must come with high profile prosecutions once these fraudsters are identified.
Bowen believes there is a fine line between appropriate prevention and losing business, and it’s essential we get that balance right.
Catherine Neilan, news editor, Drapers