The consumer group Which? has recently published the findings of a survey that delves into the prevalence of scams in secondhand marketplaces. The results indicate that a notable 32% of buyers fell victim to fraudulent activities between January 2022 and January 2023. Platforms such as Depop, Shpock, Preloved, Amazon, and eBay were identified as the primary hotspots for fraudulent transactions. Shockingly, the first six months of 2023 alone saw a staggering 77,000 reported cases of fraud, constituting 66% of the total figures.
The survey highlights various common scams, including receiving incorrect or no items, encountering counterfeit products, or receiving empty packages. Of particular concern is the growing issue of authorised push payment (APP) fraud, necessitating a more robust approach to combating fraudulent activities in secondhand marketplaces.
Maciej Pitucha, VP of Data Intelligence at Mangopay, has underscored the critical importance of marketplace operators remaining vigilant against ever-evolving fraud tactics. As intermediaries, platforms must fortify their fraud protection measures due to the inherent two-sided nature of their ecosystems, which heightens the potential for fraudulent activities. Fraud can originate from both sellers, who sell counterfeit goods, and buyers, who may use fraudulent details to make purchases. Furthermore, fraudsters are increasingly harnessing AI technology to automate their operations and create fake identities, documents, and checkout pages in a more rapid and elusive manner.
Given the weaponization of AI by fraudsters, businesses must leverage advanced technological solutions to counteract these nefarious activities. Maciej has highlighted the efficacy of generative AI in developing sophisticated biometric authentication methods, such as deep-learning powered facial and voice recognition systems. These high-tech measures can effectively thwart unauthorized access and safeguard customers from fraudulent activities.
Inna Lyubashevskaya, Chief Customer Officer at ID verification company Sumsub, has stressed the advantages of enlisting third-party anti-fraud solutions. Outsourcing such solutions can lead to substantial cost savings, customizable options, and robust fraud prevention, outweighing the benefits of in-house approaches.
Furthermore, numerous fintech companies have spearheaded efforts to combat fraud, with enterprises such as Revolut introducing AI-powered scam detection features. It is evident that secondhand marketplaces must collaborate with specialized fraud detection and prevention providers to fortify the security of their platforms.
Maciej has emphasized the indispensable role of secure secondhand marketplaces in ensuring consumer protection and fostering a circular economy, which is pivotal for a sustainable and greener future. Consequently, scaling up anti-fraud measures is imperative to guarantee consumer safety and uphold the reputations of these platforms.
In conclusion, financial technology has been instrumental in enhancing customer experiences and streamlining payment processes in secondhand marketplaces. However, it is paramount to prioritize anti-fraud efforts to uphold consumer safety and maintain the integrity of these platforms. For the latest insights on financial technology and industry updates, we encourage you to explore the latest edition of FinTech Magazine and participate in the global conference series, FinTech LIVE 2024.