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As retail crime rises, need for fraud prevention becomes clear

Feb 02, 2013 Dave King

The rise of retail crime in the U.K., driven largely by a sharp increase of e-crime, should come as a warning sign for American retailers to ramp up their fraud prevention measures.

"Systematic targeting of higher value goods by organized criminals is pushing up the cost of retail crime, but the proportion of shoplifting incidents reported to police has plummeted to just one in eight," said Helen Dickinson, director general at The British Retail Consortium (BRC).

A recent BRC study revealed that retail crime in the U.K. grew 15.6 percent in 2012 to surpass $2.1 billion in losses. Internet crime now accounts for the highest percentage of incidents, at 37 percent, while fraud led to more than a quarter of losses for retailers. Identity fraud jumped 80 percent in the last year, according to the report.

American retailers should not ignore these growing trends. In a recent blog for Help Net Security, Simon Jackson, chief commercial officer at NetNames, suggested that cybercriminals are changing their strategies, and the growing popularity of e-commerce likely has something to do with that.

He said that the internet's nature - particularly that it is a global entity with no central regulator - makes it a potential liability. Therefore, he advised retailers to be proactive when it comes to preventing fraudulent online sales.