Marketplaces Rise in Fraud – Puppies and Consumer Electronics Most Likely to Be Scams

The Christmas season is here and while the festivities kick off online retailers hold their breath and wait to see whether all of the preparations they have diligently made will pay off in revenue and sales during this ‘Golden Quarter.’ Will the website be able to handle extra demand? Will all orders be able to be shipped before Christmas?

Yet, The National Cyber Security Centre (NCSC) has highlighted another pressing concern which can have a lasting impact on revenue. Last week it launched a major awareness campaign called Cyber Aware advising potential customers to be aware of an increase in fraud on online platforms this year. This is because millions of pounds are stolen from customers through fraud every year – including a loss of £13.5m from November 2019 to the end of January 2020 – according to the National Fraud Intelligence Bureau.

Fraud is a major concern for marketplaces who are aware of the trust and reputational damage that such nefarious characters on their platform can create. While consumer awareness and education can help, marketplaces know that only keeping one eye on the ball when it comes to fraud, especially within User Generated Content (UGC), is not enough. Fraudulent activity deserves full attention and careful monitoring. Trying to tackle fraud is not a one-off activity but a dedication to constant, consistent, rigorous, and quality moderation where learnings are continuously applied, for the on-going safety of the community.

With that in mind, our certified moderators investigated nearly three thousand listings of popular items on six popular UK online marketplaces, in order to understand whether marketplaces have content moderation pinned down, or, whether fraudulent activity is still slipping through the net. After conducting the analysis during the month of November, including the busy Black Friday and Cyber Monday shopping weekend, we found that:

• 15% of items reviewed showed signs of being fraudulent or dangerous, this rose to 19% on Black Friday and Cyber Monday
• Pets and popular consumer electronics are particular areas of concern, with 22% of PlayStation 5 listings likely to be scams, rising to more than a third of PS5 listings being flagged over the Black Friday weekend
• 19% of listings on marketplaces for the iPhone 12 were also found to show signs of being scams
• Counterfeit fashion items are also rife on popular UK marketplaces, with 15% of listings found to be counterfeited.

The research demonstrates that, even after any filtering and user protection measures marketplaces have a significant number of the products for sale on them are leaving customers open to having their personal details stolen or receiving counterfeit goods. We know that many large marketplaces have a solution in place already, but are still allowing scams to pass through the net, while smaller marketplaces may not have thought about putting robust content moderation practices and processes in place.

Both situations are potentially dangerous if not tackled. While it is certainly a challenging process to quickly identify and remove problematic listings, it is deeply concerning that we are seeing such a high rates of scams and counterfeiting in this data. Powerful technological approaches, using AI in conjunction with human analysts, can very effectively mitigate against these criminals.

Ultimately, it should be the safety of the user placed at the heart of every marketplace’s priorities. It’s a false dichotomy that fail safe content moderation is too expensive a problem to deal with – in the longer term, addressing even small amounts of fraud that is slipping through the net can have a large and positive long term impact on the financial health of the marketplace through increased customer trust, acquisition and retention.

2020 was a year we would not want to repeat from a fraud perspective – we have not yet won the battle against criminals. As we move into 2021, we’ll be hoping to help the industry work towards a zero-scam future, one where we take the learnings and lessons together from 2020 to provide a better, safer community for users and customers, both for their safety, but also for the long term, sustainable and financial health of marketplaces.

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