In the largest operation of its kind, trading standards carried out 799 test purchases between 20 October and 10 November. A massive 148 (19%) of test purchases resulted in a sale. Test purchases were made at stores across London, using teenage volunteers, including police cadets. Of the sales, 32 per cent were from recognised high-street chain retailers. Knives sold to underage customers ranged from standard kitchen knives and blades through to a machete being sold to a 14 year old.

MPS Commander Mark Simmons commented: "We are pleased that retailers are becoming aware of the changes to legislation regarding the sale of knives and operations such as these will act as a reminder to those individuals who continue to flout the law that they will be caught and prosecuted.”

The online operation was announced at a press conference held on Tuesday 16th December and is expected to last for 3 months. London Trading Standards (LoTSA) will trawl internet sites that sell knives carrying out test purchases and monitoring and prosecuting those that unlawfully sell to under-18s. The purpose of the operation, the largest of its kind to date, is to reduce online access to knives for under-18s, while gathering evidence as to how easy or difficult it currently is for a young person to purchase a knife online.

The Violent Crime Reduction Act 2006 stipulates that is prohibited to sell knives to persons under the age of eighteen. To find out more about selling age restricted goods online, please visit: www.192business.com/agerestriction.

Age verification for online customers is simple to implement, cost effective and robust. To see how you can age verify your customers, and protect your reputation and profits, please request a trial today.

View the full Trading Standards release here: http://nds.coi.gov.uk/Content/Detail.asp? | ReleaseID=387731&NewsAreaID=2

As part of the report, 107 UK online retailers are visited and orders are placed with each, with the orders tracked from start to delivery completion. 30 of the sites surveyed appear on the IMRG-Hitwise top 50 retailers, and the report gives details for all of the retailers, in comparison to the other 77 sites surveyed, to show trends amongst the top performers.

Importance of online shopping delivery
The report explores the cost of receiving an online delivery, citing John Lewis as just one retailer to have successfully implemented free website delivery. It also explores the choices available, online support and order fulfillment quoting only 71% of orders placed arriving on time. The report makes for interesting reading, especially with Christmas falling on a Thursday, meaning that website customers have longer to place an order in time for Christmas delivery. The Royal Mail has also taken into account the later posting dates, and increased demand and have introduced Sunday redeliveries on 21st December as well as evening deliveries on Monday 22nd and Tuesday 23rd.

Billing Address Verification
Fraud Managers may be particularly interested in the Delivery Flexibility section of the report. Figures show that only 9% of online retailers insist on delivering the first order to the billing address, however whilst 2 retailers had abandoned this policy since 2007, another 2 had implemented it, which the report suggests is “probably in the light of increased fraud”.

Does your fraud policy allow split delivery?
More surprisingly were the findings on split delivery; only 12% of online retailers allowing 2 items to be delivered to 2 addresses within one transaction. Whilst gift and wine suppliers were more likely to offer this service, no electrical suppliers provided this service, again perhaps due to the risk of fraud. Address verification across multiple addresses is a low cost check, and implementing this may help retailers stand out in an increasingly competitive market, as well as retaining higher spending customers.

International Address Verification
Another area for improvement is international delivery. Only 24% of retailers surveyed were fully international, with 48% only delivering to UK addresses. With international address verification from 192, ecommerce operators are able to capture, cleanse and verify address and customer details in 237 countries, allowing greater flexibility, especially useful for those Christmas gifts to expatriate friends and family!

The report shows a positive outlook for online fulfillment, albeit with areas for improvement, perhaps best summed up by one of the surveyed retailers as:

“We are constantly reviewing our delivery services to best suit the needs of our customers. We feel that by offering our customers a wide range of delivery options, they are likely to find one which fits with their requirements.”

The full report is available for free download at: http://www.snowvalley.com/reports

To find out how 192 can help you allow more flexible deliveries and prevent fraud, please contact us for a free demo and trial of our services.

The arrests came after intelligence was received in July, but came to late to stop an estimated £40million being defrauded. It is believed that the gang used the stolen information to then buy commodities such as gold and diamonds.

Police are also making arrangements to extradite a fourth man who is believed to be involved with the fraud, but left the company before he could be arrested.

The arrests follow speculation that card fraud is becoming increasingly common in Dubai and has similarities to a gang caught using stolen cards to buy laptops and other high value electrical items.

The CID team in charge of the arrests have renewed warnings to the public to remain vigilant in checking their bank account and credit card statements.

The data was being touted for sale at a cost of EUR 0.55 per record, with thieves even handing over a CD containing a sample of 1.2 million accounts to prove their story. Reporters from the publication met with two individuals in Hamburg before handing over the disc to the relevant authorities. It is believed that the data was stolen from a call centre, although this hasn’t at the time of writing been confirmed.

Although there have been other stories of mass data theft and loss this year, most of the data compromised has not included bank account details. The theft means that 1 in 4 German householders are now at risk of identity theft, and for UK retailers and ecommerce operators re-enforces the need to carry out international identity verification on customers.

For more information on how international identity verification can help you protect your business from identity fraud, please contact us.

Their report “Fighting Mortgage Fraud Together”, published today highlights the scale of mortgage fraud loss, estimates to be hundreds of millions of pounds. Developed by the NFSA a number of key partners were engaged in the research and development, including the Council for Mortgage Lenders and the Financial Services Authority.

As well as over valued properties, the report also highlights high loan to value mortgages, which have been abused by fraudsters to maximize their profit at low risk.

The report also highlights four key areas of improvement to be made:

Designing-out the fraud risks inherent in different mortgage products and processes
Instigating preventative safeguards and controls within firms at the right level to make mortgage fraud easier to spot and stop.

Ensuring professional integrity amongst key professional sectors
Driving up the risk to perpetrators through more effective detection and prosecution
Welcoming the NFSA’s report, Attorney General, Baroness Scotland QC said,

“In this difficult economic climate, more than ever, we need to be protecting ourselves and consumers from mortgage fraud. Mortgage fraud has had a troubling impact on the financial services sector and housing markets. It can also have devastating effects on those families who may find themselves in financial difficulties as a result of artificially inflated prices or identity theft.”

The full mortgage fraud report is available here.

With card fraud now estimated at £535 million (APACS statistics) and on the increase, companies need to ensure they are protecting their profits especially in such an economically unsound climate.

SecureTrading’s Identity Check has integrated 192’s identity verification databases to enable Internet-based merchants to better recognise and block attempted fraudulent transactions. SecureTrading Identity Check allows merchants to cross reference buyer information using a number of databases to verify if someone exists and lives at their given address.

By bringing together innovative payment services and 192business.com’s fully integrated counter-fraud solutions, businesses can be confident that they are not only stopping fraudsters hitting their sites but also allowing their valuable customers to transact without losing them to the competition.

Ian Green, Director, 192business.com “we are very excited about this partnership and believe that by bringing together payment tools and identity verification we can get closer to that silver bullet to stop fraudsters in their tracks”.

John Lyons, Chief Security Officer at SecureTrading said: “As an industry leader we must work closely with other industry leaders such as 192business.com to do everything possible to stamp out online fraud, ultimately reducing crime and increasing consumer confidence in online transactions.  Our solution is the only fully integrated service available in the UK on a pay-as-you-use basis for all sizes of online merchant., Businesses can now benefit from being able to immediately check and verify customer identities and age from a review of transaction details, making it simpler and easier to prevent fraud than ever before.”

About SecureTrading:

SecureTrading is the UK's leading independent Internet Payment Service Provider (PSP), with more than 10 years of experience providing secure real-time payment processing for businesses operating online. SecureTrading is trusted by many of the UK’s best-known brands and offers a diverse range of innovative payment services that are tailored to meet the precise needs of its customers.

Using SecureTrading’s leading-edge products and systems, companies can accept all credit and debit cards along with alternative payment methods such as PayPal and Ukash. Furthermore, these innovative technology solutions are reliable, scaleable and easy to integrate with any e-commerce site, working seamlessly with shopping cart software and customer applications.

SecureTrading has the most comprehensive suite of counter-fraud services available, so businesses can make correct decisions before shipping goods or allowing access to services. In addition, the company is fully PCIDSS Level 1 accredited and incorporates 2048-bit encryption, 3-D Secure and AVS Security Code into its payment processing systems.  The launch of SecureTrading’s new suite of counter-fraud products, SecureTrading Identity Check and SecureTrading Fraud Score, makes SecureTrading’s Payment System one of the safest ways to trade online.

“It is alarming that so many online traders seem ready to sell age-restricted goods that could be harmful to young people without carrying out any real check,” said Ron Gainsford, chief executive of TSI.

“Traders should always make it clear on their websites if there is an age restriction on any of the products on offer. As they cannot see their customers, they should carry out an age check in each and every case.  There are agencies that will carry this out for them for a small fee per check – with the electoral register being a prime source for the information.

“If there is any doubt that a person is old enough the sale must not be made.”

During November, the trading standards service for the London Borough of Brent and Harrow successfully prosecuted two website traders for selling knives to a 13-year-old girl without asking for her age – and more court cases are in the pipeline.

And, during October and November, surveys by two other trading standards services – in Staffordshire and the London Borough of Ealing – found that 15 out of 16 sites tested sold age-restricted goods to youngsters.

The results were revealed during TSI’s National Consumer Week, launched at the Office of Fair Trading in London on Monday 17 November, for which the theme is ‘be a savvy shopper this Christmas’.

“As Brent and Harrow trading standards have shown, they can face prosecution if they continue to ignore the law and supply age-restricted goods to people who are too young.”

Debit Card Under-age purchases

Using his own debit card but working under the supervision of a trading standards officer, Alex, a 14-year-old Staffordshire boy, managed to buy goods for which he was too young from all 11 websites tested during November 2008. The items included an uncertified pornographic film, ‘18’ and ‘15’ certificate films, three ‘18’ certificate violent DVD games and five knives, which should not be sold to people aged under 18.

Two sites asked for a date of birth – but they did not make any check if a false date was given. On one of these sites, Alex entered his real date of birth first and then went back to falsify it – and the company progressed the transaction.  Alex’s full name is not being disclosed so that he can continue to help his local trading standards service to test online traders for the sale of age-restricted goods.

The service is now writing to all of the retailers involved in the test purchasing exercise to advise them that they have broken the law. The offences are to be further investigated.

Alex said of his online shopping spree: “I can’t believe it was so easy. If I went into a shop I would have been asked my age or to provide ID.”

Under-age Prepaid Card purchases

In the London Borough of Ealing, during October, a 16-year-old year old boy, supervised by local trading standards professionals, managed to buy two Certificate 18 DVD films and two kitchen knives, using either a debit card or prepayment card for the transactions.  However, an attempt to buy an age-restricted DVD game was unsuccessful.

Two of the websites involved did not ask for any age details and another just asked the purchaser to confirm their age range. One stipulated that purchasers must be over 18 and another asked for the date of birth.

In March, the London Borough of Brent and Harrow trading standards organised a test purchasing exercise with the help of a 13-year-old girl, using a prepayment card.

She managed to buy a bottle of Bacardi, a bottle of whisky, four knives – including a machete and a jungle knife – and spray paints.  However, two attempts to buy fireworks failed.  Out of 12 attempts to purchase age restricted goods, a total of eight sales were made to the girl.

Traders Fined

Following the exercise, a trader from Norwich, pleaded guilty at Harrow Magistrates Court to supplying a machete to a person aged under 18.  Earlier this month (November), the trader was given a two-year conditional discharge and ordered to pay £475.50 costs.

At Brent Magistrates Court, also this month, a company from Bolton was fined £1,500 and ordered to pay £400 costs after admitting selling a kitchen knife to the 13-year-old.  The firm was also fined a further £500 after admitting not giving its correct business name details on stationery.

Two more prosecutions are to follow over the sale of knives and the two companies that sold spray paints have been cautioned by trading standards.  Investigations continue in the cases of the two sales of alcohol.

Brandon Cook, TSI lead officer for age-restricted sales, said: “Online gambling sites have got their act together and employ agencies that carry out checks on the age of customers before agreeing to take their money.

“All online retailers should introduce a proper age-checking procedure. It is disturbing to know that, in our survey, Alex managed to buy DVD games and films which were unsuitable for someone his age, as well as knives.

“We would also like to alert parents to the need to supervise their children’s purchases on the internet and make sure they are not getting access to goods that could be totally unsuitable for their age.”

With the festive season approaching, the challenges facing retailers selling age restricted products multiply.

DVD’s, Computer Games and Alcohol specifically become more attractive to minors, either as innocently purchased gifts, or because they have access to more funds at this time of year. Of course, enforcement agencies also see this challenge and will increase their attention in this area.

In order to protect minors, and to ensure compliance with relevant legislation, IMRG, the industry body for internet retailing and one of their members, 192business.com, an age and identity verification specialist, today recommend that e-Retailers pay close attention to their sales channels involved with selling age restricted products, and the protections that they have in place, during the festive trading period.

Areas to note are:

1) Payment Card types are no longer a definitive verification of age - Many prepaid cards can not easily be differentiated from credit cards and minors have widespread access to bank accounts with debit cards that can be used for internet purchases.

2) In the case of age restricted products, it is recommended that first time orders are only sent to the card billing address.

3) Card type, Address Verification Service (AVS) and CV2 are pieces of information to assist with verifying age and identity, but do not provide a complete picture on their own.

4) Retailers should make use of third party tools for ID and Age verification, to both cut down on fraud and to ensure that age restricted products are only available to appropriate customers.

A wide range of legislation is in place relating to the sale of age restricted products. The challenge for e-Retailers has always been the ability to verify a customer’s age, the technology wasn’t in place and self certification by customers was the only method by which sales of these products could be restricted.

IMRG encourage enforcement agencies to engage with retailers and take a common sense approach to this issue. IMRG and the e-Retail industry recognise the need for socially responsible retailing and supports action to minimise the risk of age restricted products falling in to the wrong hands.

Andrew McClelland, Director of Business Development at IMRG, the industry body for Internet Retailing says that “Technology and political will are now making the current methods of compliance obsolete; the days where a tick box confirming the customers age are limited. Card types no-longer provide a definitive picture of a customer’s age and reliance on one type of Database check can prove ineffective. Rather, all of these pieces of information should be used to build a picture so that an informed decision can be made about whether an order should be dispatched or not. A sensible rule-of-thumb is, if you are not sure, do not ship the order.”

David Pope, Marketing Director at 192business.com, a leading provider of age and identity verification solutions reports “The legislative background to retailing age sensitive goods is wide and varied and online retailers often aren’t aware of relevant legislation such as the Video Recordings Act 1984 and Criminal Justice Act 1988.  To help clarify the legislative picture, we’ve just compiled a list of the relevant legislation for retailers of games, DVD’s, alcohol, knives and other age-sensitive goods.  Our research can be viewed at: www.192business.com/agerestriction

"Gavin Matthews, Head of Retail at leading commercial law firm Bond Pearce LLP added that historically only a small minority of local trading standards departments carried out test purchasing operations of age-restricted products online. However with knife crime among young people and underage drinking high on the Government's agenda this is likely to change in the near future."

IMRG and 192business have also engaged relevant industry bodies such as the Wine and Spirits Trading Association and the British Board of Film Classification in their call to remind online retailers of their responsibilities to trade responsibly this festive season.

“We are delighted to be able to help our members in what is a very important area for distance sellers. By using age verification, companies can ensure they are meeting their legal obligations not to sell alcohol to those underage”, said Jeremy Beadles, Chief Executive at the Wine and Sprits Trade Association.

The British Board of Film Classification has a strong record in providing enforceable film and media age restrictions for the cinema and the traditional retail sector. BBFC.online member businesses using the internet to retail or deliver film and media content digitally have the same responsibility. We are recommending that members use customer age verification solutions” said Andrew Cooke, Business Manager, BBFC

In response to this changing landscape, IMRG, in conjunction with 192business.com, the WSTA, BBFC and Bond Pearce LLP, are running a clinic in early 2009 which will bring retailers up to date with new developments and highlight existing legislation.

So what can online retailers do?

192 offer a real time age verification service, available to manually check orders, or to integrate into your order process via API.

Our services can also help you lower your fraud and chargeback rates, whilst supporting the customer acquisiton process. To find out more, request a free trial today or you can download our product brochures using the links below:

192 Player-ID: ensures that internet gaming sites can detect players under the age of 18 during the account creation process.

192 eShopper-ID: enables retailers to verify customer age and identity  during the transaction process.

The data from the profiles is gathered from the Consumer Payments Survey, which surveys 3859 adults aged 16+ each year, and aims to show the differences in spending patterns and how people deal with managing money.

When considering fraud, one worrying factor highlighted in the profiles, is that whilst 93% of over 65’s always check their bank and card statements for unfamiliar transactions, only 54% of 16-24 year olds bother to check for payment fraud.

The profiles also offer other interesting payment information, and can be viewed by age and gender. 16-24 year olds for example spend the least amount online each year, making an average of 17 online payments of an average of £48. This is compared to the average adult who makes 21 online payments per year at an average amount of £66 each.

Other points of note are that women are more likely than men to use phone and internet banking; 52% of women utilize the technology compared to 48% of men.

Men however hold more plastic cards than women, with the average man holding 4.4 plastic cards compared to an average of 4 held by women.

The full profiles can be viewed online at: http://www.apacs.org.uk/resources_publications/Paymentprofiles.html

American financial institutions have been given until the 1st December 2009 to comply with these regulations, which will include all credit card transactions as well as electronic fund transfers and cheque payments.

The Treasury Department issued a statement saying:

"For purposes of the rule, unlawful Internet gambling generally would cover the making of a bet or wager that involves use of the Internet and that is unlawful under any applicable federal or state law in the jurisdiction where the bet or wager is initiated, received, or otherwise made."

American Financial Institutions have used the consultation period to argue that the proposed rule would create an undue burden, and that policing UIGEA will result in compliance costs greater than any social benefits which would occur. Worries are that, because of this extra burden, UIGEA will have a negative effects on the competitiveness of the U.S. payments systems.

The Treasury Department says the comments were taken into consideration, but says it believes "that flexible, risk-based due diligence procedures at account opening, such as those set out in the final rule, present the best option for balancing these two interests."