‘Ecommerce fraud is a mass crime in Germany’

Ecommerce fraud is becoming a real problem in Germany. But why is German online retail particularly prone to this type of fraud? It has everything to do with the preferred payment method of German shoppers.

A common form of ecommerce fraud is when the scammer orders something online, chooses to pay on account, provides a false or found name and account number, and gives a certain address where he can then pick up his order. The fraudster runs off with his expensive, but free product, while an innocent person is stuck with the bill.

Easy to commit ecommerce fraud in Germany

Television program ZDFzoom showed how easy it is to commit ecommerce fraud in Germany. Only getting someone’s name and date of birth can sometimes be enough to trick online shops. The television crew spoke with the head of a gang of about 200 fraudsters. He’s currently in prison as he got arrested after six years of investigation. He and his network stole about 13 million euros, generated through about 26,000 online orders.

Fraudster deliberately chose Germany

According to the Russian fraudster, he deliberately chose Germany after trying to commit fraud in several other countries. “Compared to other countries, the security system in Germany is the weakest”, he says.

The German security system is the weakest.

The fraudster blames the companies that make their payment mechanisms available to online retailers in Germany. “They boast that they are particularly good at detecting attempts of fraud, but in practice they often fail anyway.”

Germans like to buy on account

This is also due to the preferred payment method of German online shoppers, as they like to buy on account. “But if I make paying too difficult, nobody buys anymore and then I don’t make any more sales”, a spokeswoman for service provider Ratepay tells Stern. So, most retailers have little choice but to offer the risky invoice as a payment method.

Of course, there are always additional security measures like two-factor authentication. But again, most consumers see these things as a hurdle. For the online retailer, it’s weighing security against sales.

For the retailer, it’s weighing security against sales.

Ecommerce fraud does not only affect online shops, there also consumers hurt by the crime. In the ZDF program, there’s Mara Bergmann. In her name there were goods ordered with a total worth of 6,000 euros, leading to trouble with debt collection agencies and possible Schufa entries (credit record in Germany).

Name and date of birth is often enough

And there is a simple, but painful reason she didn’t notice anything about the supposed orders until the reminders came: for many online shops, it’s sufficient to get a real name and date of birth in order to offer purchase on account. A customer would also have to provide a home address and e-mail address, but these won’t get checked. They can therefore be set up by the fraudsters themselves.

According to Stefan Keller from the law enforcement agency in Berlin, there were over 19,000 cases in the city-state alone last year. And the clearance rate is only 12 percent.