Survey gauges impact of fraud on businesses

Failing to tackle online fraud is increasingly damaging the brand reputation and the bottom line for thousands of businesses around the globe, says a new poll.

Almost two-thirds of all e-commerce brands (61 per cent) have found themselves at the centre of damaging public media storms when fraud hits, according to fraud prevention specialist  Ravelin’s Global Fraud Trends 2024 Survey.

The result? Damage to brand reputations, dropping stock value and loss of customer loyalty, says the company. The top types of fraud cited by respondents were online payment scams such as stolen cards; chargeback fraud; account takeover attacks; promotions, voucher and policy abuse; refund abuse; and supplier, partner and seller fraud.

Of those polled, 40 per cent reported that their brand image has been affected by fraudulent activities. This varies by sector – 40 per cent of retailers, 36 per cent of those in travel, 45 per cent in digital goods, and 38 per cent in marketplaces.

Overall, fraud has increased for three-quarters of companies around the world, with some regions suffering more than others – the UK recorded the biggest increase at 84 per cent.

The poll was carried out online and drew responses from 1,457 fraud and payments professionals from companies around the world, all with revenues of $50m per year or more, with a focus on businesses in the UK, US, Canada, France, Germany, Italy, Spain, Australia, Brazil, and Mexico.

One in four said they lose over $15m to fraud yearly, and over half (nearly 52 per cent) say fraud stifles company growth, leading to broader knock-on impacts. Customer loyalty also takes a hit for 37 per cent of companies, further impacting reputation, while stock prices fell for one in five.

Nearly 43 per cent of companies said fraud at their companies had resulted in a mention of fraud in the press or social media at least once, with nearly 20% indicating that had occurred on multiple occasions.

The most commonly deployed technological responses to combat the problem were two-factor authentication, machine learning/automation, IP analysis, device ID/fingerprinting, rules engine, graph networks, behavioural analysis, and consortium data.

"In a highly connected world where reputations can be globally trashed with just a few keystrokes, brands must do more to mitigate against fraud," said Ravelin chief executive Martin Sweeney.

"A company's reputation means everything and must be protected as if it’s a matter of life and death – from a business perspective, that’s exactly what it is."