Today’s ecommerce professionals, including small to large UK retailers, are concerned that they do not have adequate technology or processes in place to conduct effective age verification and identity checks online, according to new research released today by LexisNexis Risk Solutions.
The research, which surveyed 200 senior ecommerce professionals responsible for e-retail activity, found that 78% of ecommerce businesses are concerned about selling age restricted goods or services to minors online due to the age verification methods they currently have in place. These products include cigarettes, alcohol, knives and fireworks, with the results suggesting opportunities for retailers to strengthen existing protection policies.
More than half (61%) of respondents said that they use self-certification (tick box/date of birth entry) to check their customers’ age online. This figure was higher among the respondents from larger* ecommerce businesses, 79% said that they still use this method, which is susceptible to dishonest input. Despite the risks with self-certify age verification methods, only 30% of ecommerce businesses use Know Your Customer (KYC) checks via specialist credit check or identity check software.
Worryingly, 83% of ecommerce businesses said that they feel that they need to conduct more comprehensive identity verification to mitigate identity fraud, which is a growing threat for consumers online. Recent statistics from the not-for-profit organisation for financial crime, Cifas, found that victims of identity fraud rose by 57% last year, with 86% of the identity fraud cases committed online.
Steve Arnison, Director, LexisNexis Risk Solutions, said:
“Retailers have contended with the challenges associated with selling age-restricted goods online for some time. Striking a balance between strong age verification checks that ensure they meet their legal obligations and protect their customers, whilst at the same time limiting friction to the shopping experience, is a priority for them.
“Our survey has highlighted opportunities for ecommerce businesses to strengthen procedures for determining the age of their customers. Many are still using an out-dated self-certification tick box approach, which on the one hand is quick and simple for the consumer, but is wide-open to misuse resulting in dangerous products being delivered to underage consumers.
“There is a widespread misconception that integrating robust identity verification technology will complicate the checkout process and make it more time-consuming for the consumer, however this is not the case. Today’s age verification software seamlessly integrates into a retailer’s ecommerce system so that checks are automated in real-time, with no need for the customer to input extensive personal information.
“As well as adding the protection for young people that society and government increasingly demand, improved identity verification brings businesses other benefits, not least of which is a better defence against fraud. Card-not-present fraud is a growing issue, so much so that it cost businesses £398.2m in 2015. With the right technology in place, online retailers will be able to gain a clearer view of who they are conducting business with, allowing them to proactively reduce the risk of identity fraud and underage sales.”