Action on fraud
New rules for online shopping purchases
Online customers will see changes in the way they shop from today as part of moves to combat fraud.
New rules will mean customers being asked to input a code or other form of identification after making a purchase over £25. This could include a fingerprint or facial ID, a passcode or password.
In practice, this could mean customers are asked to verify a purchase via text message, receiving a passcode which they are then prompted to enter on screen.
Other confirmations could include answering an automated phone call to a landline or mobile, or through an app on a smartphone.
Some types of transactions are exempt from strong customer authentication, meaning customers may not always be asked to complete extra security steps. These may be purchases deemed ‘low-risk’ of fraudulent activity, such as when buying low-cost items, or repeated purchases such as subscriptions.
Retailers are ready for the change, having been preparing their systems for many months to process these extra security checks. Successful roll out of the new regulations – called Strong Customer Authentication – will also require banks to be prepared for the changes.
The new rules aim to tackle rocketing fraud rates as consumers increasingly rely on the internet to complete everyday tasks.
According to a new study by Which? the number of cases of online scams reported to Action Fraud in the year to April 2021 rose by 33% to over 413,000, compared to relatively modest rise of 8% a year earlier.
Online shopping fraud was by far the most prevalent, with more than 103,000 people stating they had fallen victim to shopping scams, more than the next three categories combined.
The average cost of an online shopping scam was £674, meaning UK consumers lost over £69 million last year.
Tom Ironside, director of business & regulation at the BRC, said: “Retailers have been working hard to prepare for the Strong Customer Authentication requirements, ensuring online purchases are both as safe and easy as possible.
“The BRC and our members have worked with suppliers to ensure multiple fraud checks are performed behind the scenes and any additional friction is kept to a minimum. Customers should be reassured that buying online has never been safer.”