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Economic pressure contributes to e-commerce fraud spike

Economic pressure contributes to e-commerce fraud spike
Economic pressure contributes to e-commerce fraud spike

The high cost of living, tight economy, salaries that are not keeping up, and unemployment are all weighing down on Australians, causing many to act in corrupt means, believing it’s their only way to survive. 

New research by the fraud and prevention firm Ravelin has found that nearly half of all internet shoppers have committed fraud within the last year. It’s also found that the fraud is widespread across the UK, France, and Germany. Ravelin polled more than 6,000 adults. 

Older people are easily trapped

Proactive Investors reports that participants 45 years and older are more prone to fraudulent activities. This could be linked to their technical background and skills. 

Despite popular belief, young adults make up only 17% of those who commit fraud

According to reports, the fraud allegations range from lying about goods that never arrived to requesting a refund or replacement for “broken” items, knowing there’s nothing wrong with the item. Often, customers also return items without following the right protocol. 

What can businesses do to minimize this huge financial loss? 

  • Train merchants to be more strict with the approval of refunds.
  • Have a strong and legal return policy in place and enforcement of it.
  • Place strict measures in place to avoid customers claiming an item is damaged, to keep both. 

Inflation expectation for 2024

Inflation is not coming down fast enough to return to the Reserve Bank of Australia (RBA) target by 2025, as the central bank’s board intends, says Luci Ellis, chief economist at Westpac Banking Group. “So the Board needed to respond and did so by raising rates this week.”

The bank increased the cash rate by 0.25% to 4.35%. “Inflation is too high, and the reserve bank is trying to bring inflation back down below 3% by the middle of 2025,” says Ellis, adding that it finds it harder to achieve this. “Each time they see inflation not going down as quickly as they’d hope, they are responding to that.”

Ellis believes the economy has been a “little more resilient” than the RBA board originally thought. “Unemployment remains very low, and they have actually revised down their unemployment forecast for 2024-2025.” 

Many Australians are grappling with the higher cost of living, while their wages are also not increasing. The economy overall has been supported by strengths in other parts. Rising housing prices, and a strong population growth. Over the next few months, they will watch the data carefully, particularly inflation, unemployment, and the world economy as spending in Australia. If things turn out as expected, they may be content from here,” explains Ellis. 

About the author

Mia is a multi-award-winning journalist. She has more than 14 years of experience in mainstream media. She's covered many historic moments that happened in Africa and internationally. She has a strong focus on human interest stories, to bring her readers and viewers closer to the topics at hand.

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