Retail fraud on the rise amid broader surge in financial crime

Fraud incidents surged to an estimated 3.9 million cases in England and Wales in the year ending September 2024, marking a 19 percent increase compared with the previous year, according to the Crime Survey for England and Wales (CSEW). This sharp rise brings incident levels back in line with those observed in March 2020, before the pandemic disrupted data collection. Consumer and retail fraud have shown particularly concerning growth, increasing by 26% to approximately 1 million incidents, as fraudsters exploit digital retail channels with growing sophistication.

Bank and credit account fraud climbed 15 percent to 2.2 million incidents, as cybercriminals targeted both consumers and businesses. Nearly 2.9 million fraud cases involved financial loss, with reimbursements made in 1.9 million of those cases. However, only one in seven fraud offences was reported to police or Action Fraud, highlighting a critical gap in how fraud is tracked. Marko Maras, CEO and founder at Trustfull, notes that this rise in retail fraud is partly driven by fake web shops preying on consumers' desire for high-end items. "With a 26 percent surge in retail fraud reported in the latest ONS figures, it’s clear that consumer protection measures must be ramped up. The rise of fake web shops designed to deceive shoppers into purchasing designer items they will never receive is a growing concern, with Lloyds Bank estimating this type of fraud drove a 211 percent increase in card payment disputes in 2024."

Businesses are also at increasing risk. "Cybercriminals are aggressively targeting online businesses with refund and return scams at an unprecedented rate," Maras continues. While U.S. retailers like Target have begun revoking return privileges for repeat offenders, other regions have yet to adopt similar strategies. With high-consumer events such as Valentine’s Day and Mother’s Day on the horizon, fraudsters will have ample opportunity to exploit refund policies, blending fraudulent activity into the seasonal surge. To combat this, Maras highlights the importance of open-source intelligence and real-time monitoring to detect red flags such as mismatched shipping and billing addresses or high-risk IP addresses, helping retailers stay one step ahead of increasingly sophisticated fraud schemes.