Black Friday is here, and though the somewhat ominous sounding name does not usually spell dread for bargain hunting shoppers,they have been cautioned about potential fraudulent activity.
Featurespace, a financial crime prevention company recently purchased by Visa, has published research suggesting that 46% of people have experienced an increase in scam activity during busy shopping periods.
Black Friday and Cyber Monday are the two biggest sales events of the year, and understandably catch a lot of consumer interest. According to data from Checkout.com, a B2B payments firm, 50% of UK customers alone plan to buy presents for partners in Black Friday offers.
A further 16% said that they are specifically waiting for Black Friday and Cyber Monday deals. Amid this interest, there is a concern that fraud activity like purchase scams can fall through the cracks during this busy period, particularly as people look to get a deal on Christmas gifts.
Dave Excell, Founder of Featurespace, comments: “Fraudsters choose busy shopping moments such as Black Friday or the run-up to Christmas when consumer spending peaks to target unsuspecting victims.
“Peak periods such as Black Friday sees retailers competing for the best discounts to attract buyers, providing the perfect opportunity for scams to also include ‘too good to be true’ offers to lure victims in the noise of the other offers, or with a last-minute gift or a popular item that’s quickly sold out.
“With this change in consumer behaviour comes increased spending and higher value purchases.”
Fraud has been highlighted as a significant problem in the UK financial system and one of the country’s biggest criminal threats, accounting for around 39% of all reported criminal activity.
To counter this threat the government has given new powers to banks, HMRC recently invested £300m in fraud prevention efforts, and the Payment Systems Regulator (PSR) has introduced a new reimbursement requirement.
There has been a lot of discussion about the role social media firms can play in preventing fraud, however. A number of banks such as Barclays, Revolut, TSB and NatWest have cited data showing that social media is often used by fraudsters to commit crimes, whether by advertising false purchases or investments or by directly reaching out to victims.
Featurespace’s research, meanwhile, found that 82% of UK consumers believe social media platforms need to do more to stop scammers, and 80% say they are now more cautious about potential fraud or scam activity on social media platforms.
Data shows that social media does play a significant role in contemporary payments, and when coupled with studies conducted by the aforementioned banks it is hard to deny that social media also plays an unwitting significant role in fraud.
Featurespace cites a study conducted by Retail Economics and TikTok, for example, showing that 56% of UK users have made a purchase directly through social media within the social e-commerce industry, which is worth £7.4bn.
This data has been noted by the government, which is planning to put more fraud prevention responsibility on Big Tech. Meanwhile, the PSR itself has also noted the role of social media, whilst continuing to defend its reimbursement policy introduced last month.
“We know that a significant majority of fraud takes place through social media platforms,” Oliver Hammer, the PSR’s Head of Compliance, said at the Financial Crime 360 conference last week.
“That data shines a light on the fact that this is an area of the fraud landscape that is not as regulated as others, and yet this is the area where fraud is originating most often.
“We will continue to push to have a national response to fraud and we think it’s really important that telecommunications play their part.”
