Government Aims to Tackle Online Fraud

The UK government has admitted that existing regulations designed to protect consumers and businesses from fraud need to be updated to cope with increasing amounts of online commerce.

In a statement Consumer Affairs Minister Gareth Thomas said that British consumers are among the most prolific users of online commerce in Europe and subsequently increasingly at risk from online fraud.

“E-criminals and fraudsters can be highly sophisticated, mobile, working across regional and national boundaries. With British consumers making almost double the amount of online transactions compared to the European average, they are twice as likely to be exposed to online fraudsters,” said Thomas.

The government is planning to publish a whitepaper on the issue later this year, setting out plans to update consumer protection to allow for the changes brought in by the rise of online transactions.

“Our current system is designed to protect the consumer who goes to a shopping centre or retail park. But the modern consumer is now increasingly buying goods and services through websites that could be run from anywhere in the world, with goods shipped and delivered across borders,” said Thomas. “We need to create a regime that is fit to protect the consumer from modern fraudsters and criminals.”

Part of the government action includes allocating an extra £10 million to the Citizen’s Advice Bureaux network across England and Wales.

According to a European Commission report on cross-border e-commerce in the EU, in 2008 32 percent of individuals ordered goods or services over the Internet. In the UK in 2008, 57 percent of individuals had ordered goods or services over the Internet.

Banking trade body APACS released figures in March showing that online fraud in the UK increased by 132 percent from losses in 2007. Detailing total fraud figures across all forms of payments, the UK payments association said Internet only fraud totaled around £52.5m.

Another report released by mainframe vendor Unisys this month revealed that 72 percent of UK consumers who took part in the survey were concerned that their identities would be compromised as the downturn helps fuel crime levels.