Cyber shoplifting costing retailers billions, driving up prices

Source: National Cyber Security – Produced By Gregory Evans

A thief looking to scam a credit lender goes on an online shopping spree, ordering thousands of dollars worth of goods. When the bill comes, he calls the credit card company and claims they are fraudulent charges. In good faith, the lender issues a “chargeback,” or credit, to the customer’s card, and the thief gets away with cyber shoplifting. This crime is costing retailers up to $16 billion per year, and it’s making online shopping more expensive for consumers, as retailers pass along the costs associated with cyber shoplifting, said Monica Eaton-Cardone, co-founder and chief operating officer of Chargebacks911. “Banks aim to keep their cardholders happy and typically assume ‘the customer is always correct.’ … [This] often leads to automatic chargeback refunds without further investigation or analysis,” she said, noting that cyber shoplifting falls under the larger category of “friendly fraud.” “Chargebacks give consumers a loophole where they can call their bank or the merchant for an online transaction where they claim they didn’t receive the product or they could say, ‘I don’t recognize the transaction’,” Eaton-Cardone added. According to Lexis-Nexis’s 2014 True Cost of Fraud study, merchants benefited from a $30 billion increase in online spending this year. However, the study […]

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