Over two fifths (43%) of people are put off selling items or services online due to the risk of fraud according to newly published Fraud Tracker data from Shieldpay, the secure payments provider.
The rise of online marketplaces, such as Facebook Marketplace, Gumtree and Shpock, has supported a rapid increase in people buying and selling items online. As many as 30% of the population has sold an item or service, such as plumbing or carpentry, online, that equates to nearly 16 million people1. However, this has exposed more of the population to fraudulent activity. Nearly half (47%) of people who have sold an item or service online have fallen victim to fraud and on each occasion the seller loses, on average, £2,0542.
This raises the question of whether online marketplaces are putting the correct measures in place to safeguard not only buyers, but also sellers. Just one in five (19%) people believe online marketplaces are doing enough, 45% think sellers must take their own steps to ensure the transaction is protected and 23% believe the protections that are in place are designed purely for the buyer. Worryingly, 20% of people aren’t aware of the tricks that buyers could use to fraud a seller.
Tom Clementson, Director of Consumer and SMB at Shieldpay, said: “It’s not just buyers who are at risk in the online world. Millions of sellers have fallen foul of fraudsters and it’s putting people off using online marketplaces. Sellers turning away from online marketplaces poses a real threat to the industry, especially as it transforms to a model which depends on transaction revenue.
“This should be a wake-up call; to improve safeguards for sellers and ensure both buyers and sellers can transact without the fear they will lose out. The adoption of increasingly sophisticated technology is one solution that can help eliminate the risk. Shieldpay gives sellers and buyers confidence by verifying the parties and holding money for a transaction securely until all parties are happy to release the funds, enabling stress-free and safer shopping online.”
Shieldpay recently partnered with Rated People to offer protected payments and give consumers and the 50,000 skilled tradespeople that use Rated People a safe way to transact. Previously, once a home improvement job had been agreed, payment had to be completed by bank transfer or cash payment – leaving both sides open to fraudulent activity. Shieldpay’s patented payments process not only allows homeowners to have more control over their money, it also reassures tradespeople that the money is there to pay them for their work and protects both parties from fraudulent payments.