06 News Retail Decisions:Layout 1 15/5/09 16:24 Page 1
NEWS REVIEW
IS FRAUD THIS YEAR’S GROWTH INDUSTRY?
How to reduce the cost of fraud. By Mark Goldspink,
Managing Director, Retail Decisions.
Recession spurs fraud growth important that businesses consider what Sporting arena ripe for fraud
In the world of online ticket and measures could be put in place to help mitigate The reality is that fraud is rampant within
merchandise shopping, fraud is a prevalent fraud, while also helping consumers the sporting arena sector and is simply
player that can cost your business serious understand the degree of risk involved in disguised by the online growth trends that are
amounts of pounds and jeopardise your online ticket purchasing. being experienced in this market sector. In the
reputation; while protecting your business and Passionate fans and fraudsters - a risky face of continuing changes in the market -
your customers’ privacy can also add combination including demand, technological changes and
significant cost to your bottom line - costs that Successfully procuring tickets to a top how consumers buy and sell tickets and
could be used to build and market your match is a thrilling experience for many fans. sporting items - fraud issues weigh heavily on
merchandise and ticketing sales. After years of practice, sport fans know how to this industry. Retail Decisions, a world leader
The current economic climate affects gauge the ticket touts standing outside the in card fraud prevention systems has seen this
fraudulent behaviour in more ways than one: arena, but what about the new resellers that happen with the increase of prepaid telephony
as financial reverberations ripple across market have surfaced online in the last few years? The through the ‘90’s, and the explosive growth of
sectors, the temptation to commit ‘friendly Internet is economical, convenient and always e-commerce retail at the turn of the century.
fraud’ is greater than ever. Also fraudsters tend open - 24 hours a day, seven days a week and When searching for the right payment
to become more active during difficult the nearly 70 per cent* of the British processor to alleviate these issues, you want to
economic periods given the higher demand for population using the Internet results not only look for one that has a vested interest in fraud
products that they can obtain fraudulently - in an increase in online ticket sales, but in reduction. They should be a stable presence in
which are usually products that can be easily fraudulent purchases. the industry, savvy to online payments (online
monetised. These factors combine to further With the deepening recession, sport fanatics games and recurring billing), and possess a
exacerbate an already difficult fiscal are no longer spending the big pounds with wide range of partners that assist in risk
environment for businesses. the ticket touts outside the stadiums, mitigation and Payment Card Industry (PCI)
A lucrative playing field racecourses or venues. Instead, they are compliance.
Over the last few years the live events becoming more price-conscious and are The good news is that with the right
industry has seen unprecedented growth and looking to the Internet to find the best deals. combination of experience and tools, fraud can
popularity. However this increase in online bargain be managed to meet the requirements of the
Often the demand for tickets exceeds hunters also attracts an escalating number of Associations and revenues can be maximised
supply, as event owners and promoters tend to virtual ticket touts looking to take advantage for further business expansion.
price tickets below true market value for a of individuals’ passion for sport and their easy Ultimately, as an online service, you want to
variety of reasons, ranging from maximising willingness in trusting what may appear to be focus on the creativity and marketing of the
on-site revenue from refreshments and a legitimate seller or site. Fraudsters tempt sport - not payment fraud and billing
merchandise, to building and maintaining a keen fans with alluring opportunities to attend management. You need to accept a variety of
loyal fan base. The resultant excess demand favourite matches or purchase beloved sports payments that can be accepted easily, while at
creates the opportunity for secondary selling at items, which may suspend consumers’ the same time mitigating chargebacks and
highly profitable prices - making the sporting judgment when presented great ‘offers’. fraud.
events environment a lucrative one for According to an Internet Retailer report, It can happen to anyone - support the fans
fraudsters. event tickets are one of the five most common Being defrauded of money and not
A study carried out in 2006-07 on behalf of products purchased online; however, when receiving tickets is a crushing experience, as is
DCMS found that consumers often do not buying online, people often disregard the due paying £800 for tickets that should legitimately
easily distinguish between legitimate and diligence they normally would take if they sell for £100, or even buying tickets to a
unlawful sellers, and there have been cases were shopping in person. When buying tickets sporting event and upon arrival at the arena,
where consumers have been exploited by from the club or venue - or through an being told the tickets are fake.
unscrupulous operators.** authorised ticket reseller - precautions should Such is the situation that occurred with
Given the changes in this market and the be taken on the Internet at all times and even officialtickets.net, a fraudulent ticket Web site
unrestricted nature of the Internet, it is more so when publicly using the Internet. hosted from Israel, which was recently closed
down after 18 months of investigation. Internet
Salford City Reds v Harlequins - Murrayfield Stadium, Edinburgh,
ticket touts made hundreds of thousands of
- Salford City Reds' Richard Myler scores his sides second try.
pounds each season by selling tickets that
often never arrived to top matches.
It cannot be stressed enough that fans need
to be careful when buying tickets online. The
sporting industry would benefit from adding
information on their sites on how to avoid
exploitative online practices from those who
want to undermine the ticketing systems and
capitalise on people’s love of sport.
* According to World Internet Usage
Statistics News,
www.internetworldstats.com/stats.htm
** According to the Department for Culture,
Media and Sport, p. 9 (1.2),
http://www.culture.gov.uk/images/consultati
ons/Ticket_Touting.pdf FSA
6 | FOOTBALL & SPORTS ARENA | May/June 2009
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