British Retailers Lost Over £205M ($323M) to Cybercrime in 2011-2012

The British Retail Consortium (BRC) has released its first report focused on cybercrime and its impact on businesses from the United Kingdom. The study is based on the input of supermarkets, department stores and companies from the fashion, health, mixed and beauty sectors.

As it turns out, businesses can start forgetting about burglars who empty out cash registers and steal high-end merchandise since there’s a bigger player in town. Electronic crime has become the biggest emerging threat to the retail sector and as more and more companies move their activities to cyberspace the risks will continue to increase.

The figures from the BRC’s study reveal that e-crime caused companies to lose a whopping £205 million ($323 million or €258 million) in 2011-12, a sum which includes both direct and indirect losses.

ID fraud turns out to be the most costly type of crime, followed by card fraud which caused losses of £15 million (€19 million or $23 million). Phishing is also on the list of methods utilized by cybercriminals.

There is one more noteworthy aspect. The losses caused by cybercrime don’t include only the ones made by the frauds themselves. The extra security measures implemented by some retailers determine customers to become displeased with the whole purchasing process.

Of the total costs, around £111.6 million were lost by retailers because the additional security measures deterred customers from completing their purchases.

Unfortunately, the study shows that 60% of those questioned would probably report only 10% of criminal activities to the proper authorities.

“The rapid growth of e-commerce in the UK shows it offers great benefits for customers but also new opportunities for criminals,” BRC Director General Stephen Robertson said.

“Online retailing has the potential for huge future commercial expansion but Government and police need to take e-crime more seriously if the sector is to maximise its contribution to national economic growth. Retailers are investing significantly to protect customers and reduce the costs of e-crime but law makers and enforcers need to show a similarly strong commitment.”