Search News

Results: 1-10 of 1048


Start again

22 Mar 2024

Rob Brown, co-director of Dalby Forest Cycle Hub, a not-for-profit hire scheme has been nominated for the Tourism Superstar 2024 award, run by VisitEngland.

21 Mar 2024

ACS (The Association of Convenience Stores) and the Federation of Independent Retailers (The Fed) have both welcomed a new report published by the Association of Police and Crime...

21 Mar 2024

As reported by Healthstores UK, new data contained in the 2024 Soil Association Organic Market report shows that independent retailers delivered an impressive 10% growth in 2023, with...

21 Mar 2024

An independent bottle shop and bar in Cheltenham has been named as the UK's Independent Beer and Wine Retailer of the Year 2024 at the Drinks Retailing Awards. 

21 Mar 2024

A number of organisations, including Bira (the British Independent Retailers’ Association), other trade associations, BIDs and unions have met with officials from the Welsh Government to...

21 Mar 2024

The British Independent Retailers’ Association (Bira) has reacted to data released by PwC and the Local Data Company exploring the state of the UK retail landscape.

8 Mar 2024

Daniel Blackham, editor of industry magazine BikeBiz, has been writing about his experience of completing the Cytech technical one qualification at training provider Spokes People in Milton...

6 Mar 2024

Cytech partner Activate Cycle Academy, the largest and most recognised training provider of bike maintenance and technical training courses to the UK’s cycle industry, recently welcomed a...

6 Mar 2024

The Greeting Card Association has reacted to a BBC Panorama programme lifting the lid on Royal Mail management prioritising parcel delivery over letters, which it says are in contradiction of...

4 Mar 2024

Pop star Kate Bush has been announced as an ambassador for this year's Record Store Day, on 20 April.

Back to news menu

How fraudsters are exploiting customers using popular BNPL service providers

Posted on in Business News ,Brands & Products News , Cycles News

Improperly e-commerceregulated Buy Now Pay Later services aren't just growing in popularity among consumers, they're also proving to be a hit with criminals.

Retail finance, when used correctly, is an advantageous payment option for both retailers and consumers and it should continue to be so. It is specifically the BNPL providers performing soft credit checks where fraudulent activity is on the rise, which include Klarna, Afterpay and Affirm, according to fraud experts.

BNPL products are becoming increasingly popular among Gen Z's and Millennials, they are offered widely online by fashion retailers whereby they allow shoppers to split payments at checkouts or pay 30 days later interest-free. They've become massively popular in the U.S. and Europe, and generated almost $100 billion in transactions globally in 2020 alone.

Criminal gangs are exploiting weaknesses in the application process for BNPL loans, experts say, using clever tactics to slip through undetected and steal items such as bicycles, booze and video game consoles.

Martin Rehak, CEO and co-founder of Czech fraud detection start-up Resistant AI said that one of the vulnerabilities is BNPL firms' reliance on data for approving new clients. Many companies in the industry don't conduct formal credit checks, instead using internal algorithms to determine creditworthiness based on the information they have available to them.

Rehak said many scammers are stealing people's identities or taking over their accounts to evade detection, making unsuspecting victims foot the bill. He declined to name any specific companies being targeted, however, saying Resistant AI counts a number of BNPL businesses as clients.

Warnings of BNPL fraud are particularly timely as Black Friday kicks off the critical holiday shopping season next week. "There's going to be a huge amount of fraud hidden in there because they always lower their security checks during those events because they don't want it to impact sales," said Kevin Gosschalk, founder and CEO of fraud-prevention start-up Arkose Labs.

Consistent campaigning has now led to the UK Treasury launching a consultation into bringing the sector under regulation. The Treasury said that the consultation "sets out policy options to achieve a proportionate approach to regulation of BNPL".

Martin Lewis, founder of MoneySavingExpert.com, summarises the issue by saying retail finance "isn't automatically a bad thing to do" and that when done right it "can be a useful tool to help people spread costs."

The ACT and ActSmart, members of the Independent Retailers Confederation (IRC), has previously raised concerns about the improper regulation of BNPL providers such as Klarna, Openpay and LayBuy and the risks that they bring to potential customers.

Some debt charities argue that it is the retailer's responsibility to educate their customers of the risks being undertaken when committing to any BNPL payments. With a retailer's reputation at stake, as well as the wellbeing of their customers, it is imperative that businesses find a finance provider that they can trust and that is correctly regulated by the FCA.

The ACT have created a mini-series - Choosing the right finance provider, avoid the pitfalls - which assists retailers by highlighting what to look out for when choosing the right finance provider for you.

 

Train your staff to deliver finance effectively

Retail Finance Training, brought to you by Indie Retail Training, is a distance learning course ensuring your business sells using finance effectively and compliantly.

This course is designed for all owners and employees in a business that either currently, or plans to, offer retail finance as a payment method.

The course will teach you how to legally promote and use retail finance in-store, online and in all other forms of media. As well as covering the legal details this course also aims to make sure you maximise each sale using retail finance.

You can sign up and access a demo of the training site for FREE: https://demo.indieretail.training.

For the full course, ACT members receive preferential pricing with up to 50% off. Find out more about the full course.

 

Back to news menu

Useful links

If you have any other queries please contact us.