April 6, 2023
A new form of e-commerce fraud has become an increasingly significant problem for online retailers, McGuireWoods London partner Francesca Titus cautioned in a March 30, 2023, Raconteur special report, published in partnership with The Times.
In an article titled “Warning sines: how to detect and prevent triangulation fraud,” Raconteur reported on a new scam in which fraudsters post fake listings on online marketplaces advertising discounted goods. After taking payment from one person, the fraudster uses credit card details stolen from a different victim to obtain the product from a legitimate merchant, who fulfills the original customer’s order. This elaborate triangulation fraud leaves little evidence that can be traced back to the fraudster, and experts believe it constitutes a significant proportion of card-not-present fraud, which costs retail businesses an estimated $26 billion annually, the article noted.
Titus — who represents companies and individuals in complex, high-value white collar crime litigation — said that while the growth in e-commerce and the broader shift to online shopping during the pandemic spurred the growth of triangulation fraud, the economic downturn happening in many countries may give it a further boost.
“Fraud is on the increase across the board. This is the latest type to emerge,” Titus said. “It’s a clear growth area that will be fueled by the cost-of-living crisis as shoppers continue to seek better value for money.”