Retailers including Shop Direct have joined forces to share data with one another in a bid to curb online fraud collaboratively.
Retailers in the fraud and loss prevention coalition, named Trade, will have access to their peers’ – and rivals – customer behaviour data in real time, enabling them to spot potential fraudsters.
QVC is also a member of the coalition, which already has access to a pool of 9 million UK households, representing 39% of the market. Launched by anti-fraud specialist Transactis, further big retailers are expected to sign up in the coming weeks.
Shop Direct director of credit risk and operations John Pears said: “Trade has been put together with input from retail players that really understand the impact of fraud and the need for a loss prevention platform that addresses the challenges they face each day. The retail industry – especially the companies involved in ecommerce and other forms of home shopping – needs a system that takes this type of loss prevention to the next level.
“Previously, we’ve had to rely on data developed for use by financial institutions, which does not fully address the very specific cyber threats that online retailers are facing today. Trade will add a new, universal layer of fraud data that will enable retailers to identify these threats more effectively and reduce fraud losses as a result.”
Transactis said: “Trade allows retailers to identify fraud and loss risk related to order processing, identity verification, goods lost in transit, returns and other related activities by providing a view of the broader pattern of each customer’s behaviour across a much larger range of transactions.”
The scheme draws on data relating to individual consumers and also addresses, meaning retailers will be able to detect fraudsters using multiple identities across several organisations.
QVC UK finance manager Martin Spencer said: “Companies in the retail industry have not really worked together before to deliver a collective anti-fraud service that covers both card and credit transactions, so Trade is providing a real opportunity for a level of information-sharing that has not previously been possible. This will not only ensure quicker and more effective fraud screening, but it will mean that we and other Trade members can do a better job of making sure genuine customers get the best possible service.”
Transactis product and professional services director Dave Webber said: “There is a very narrow window for a retailer to review an order and decide what action to take. Not only is there the relationship with the customer to consider – for instance, the retailer can’t just wait and see what happens if a delivery goes missing – but there is the cost that further investigation would entail, so there is a real need for the company to have relevant information that enables it to quickly and efficiently assess a situation and prioritise the use of its resources.”