Small English Town Tagged as Online Fraud Hotspot

According to statistics compiled by a card-not-present transaction-screening company, the small English town of Shildon is one of the most active hotspots for fraudulent purchases in the UK. Local authorities have identified at least one woman who was being used as a shipping intermediary for fraudulently acquired goods.

The report was released by "The 3rd Man," a Surrey-based company, which develops credit-card-fraud prevention solutions. Its products are used by a large number of UK retailers to evaluate the risk factor of card-not-present transactions in real time, before approving them.

By compiling data from the 85 million transactions screened between August 2008 and August 2009, the company was able to identify several online fraud hotspots across the UK, including South East London, Manchester, Nottingham, Romford in Essex, Coventry, Birmingham or Erith Marshes.

However, an unlikely candidate to make it on this list is the small town of Shildon in Durham County. According to the stats, this town's 10,000 residents conducted 12,229 online transactions, out of which 3,014, almost a quarter, were flagged as fraudulent.

Concerned about the high rate of fraud in the area, The 3rd Man contacted the local authorities, who set out to investigate and came up with a possible answer for the peculiar situation. Andrew Goodwill, a director with the company, told NetworkWorld that police identified at least one person who was being used as a mule by cybercrooks.

Apparently, a local woman who started an online affair with a man that claimed to be a British soldier stationed in Afghanistan had agreed to receive gifts sent to him at her address and forward them to one of his siblings in Ghana. According to the police, she was sending several crates of goods overseas on a daily basis and her house was full of items bought fraudulently.

The woman was, in fact, being used as a shipping intermediary, or mule, for fraudsters who had a hard time finding online retailers that shipped directly to countries with a high-fraud risk. The 3rd Man estimates the total amount lost to fraud during the one-year period to be over $140 million.