Very few UK retailers employ dedicated teams of LP professionals whose task is to pursue online fraudsters to their delivery addresses and even to their own homes.
Shop Direct, the online retailer that used to be Littlewoods, is one of the few – (Next Directory is another).
The “external crime unit” at Shop Direct consists of four people, all ex-law enforcement, backed up by a much larger team of analysts who decide which addresses are worth visiting.
In his presentation at ERisk – Leicester on 5th October, Mark Bertuello, who leads this unit, will show video of what they find at those addresses, and some very real encounters with the criminals themselves.
His team conducts about 1,000 investigations per year. He explains that it’s important to Shop Direct to “front up” suspicious cases because the company wants to help the police prosecute, and the team is dealing with the retailer’s “crown jewels”, its customers.
“If you come across a customer you have got to deal with them as such until you have proved that they are not a customer and are defrauding you,” he says.
So what does the team find, at the delivery addresses, and beyond?
“You don’t always catch the criminal,” Mark says, “often you’re catching victims. Sometimes it’s family fraud. You’ll find people might have a vulnerable member of the family and are pumping an account to the maximum before they pass away. Then there are the identity thefts, people going to the Dark Web and buying identities which they use to open accounts.”
Some of the criminals are ordering deliveries to their own homes, although organised crime rings are more sophisticated. A variety of techniques are used to intercept deliveries, some of which can be seen on the videos Mark will be showing at eRisk Leicester. “High visibility fraud” involves teams wearing the yellow tabard of a delivery firm turning up at the addresses of vulnerable people who were specially selected for the delivery, persuading them that a mistake has been made, and retrieving the parcel.
“In one of our videos there’s a big fella outside the house we go to, shouting up to a very frightened lady in her bedroom who has taken in some parcels thinking they’re for someone in the family. He is telling her to hand them over. He runs off when he sees our investigator. The lady is a completely innocent dupe but the house has been linked with a fraud by our company and it is only by going to the address and speaking to the occupant that you find they are victims.
“Sometimes fraudsters can intercept a delivery at the front door or even trick a delivery driver into meeting them away from the address, telling them they are out at the moment,” says Mark. “Silly drivers do it, and some drivers are in cahoots with the criminals.
“In one of the videos we have a little chase and a bit of aggravation with some of these people trying to block them in until the police arrive, after 30 minutes, and they’re arrested.”
“You’re not going to catch people unless you try and front them up. No we don’t maybe get the main people all the time and we do get the people who agree to allow their houses to be used. But on occasions, as you‘ll see in one of our videos, you do get the main man. This one is prolific with online retailers and has been arrested twice and a third time recently, since the time that we took this video, because it has taken so long for the case to go to court.”
Fronting up the main men is not without risks. Mark was in law enforcement for 32 years, working as a detective for the City of London police for the last 20, and hasn’t yet lost his taste for adventure.
“I was threatened with a sledgehammer by someone saying he hadn’t received a TV. The police arrested him for that and found the TV in his bedroom. The company are very good, we asked for body armour and we got it, plus protective bomber jackets, surveillance equipment, tracking devices that go in the parcels – there’s a lot to it.
Lack of police follow-up and lenient sentencing have evidently deterred many retailers from investing resources in external crime units. Operation Falcon, the Metropolitan Police’s cybercrime unit, used to work with Shop Direct more often, says Mark.
“Unfortunately, now the crimes have got bigger, £1000 – £1,500 hits at a time aren’t big enough for them so we don’t have as much connection (with Operation Falcon) although now and again they help us.
“These days our jobs have to be quick turnover. Two years ago we were looking more for the prosecutions and we would sit on jobs for maybe months on end trying to get the police to take action. Now it’s a couple of weeks. If the police aren’t interested we report it to Action Fraud and move on to the next.
“With a portion of these jobs we can get recoveries. If not and the goods have been used we can sometimes get statements of admission. The fraudster can then pay us back for the goods they have used. That won’t stop us reporting them to the police but it helps them in mitigation if they are arrested for it.”
Often the cases Mark’s team follows up may be genuine cases of goods lost in transit. But following up those cases helps protect Shop Direct from fraud, he says.
“The Dark Web will tell people this or that company are a soft touch, ‘just say the item didn’t turn up, and they’ll give you your money back’. Conversely there was advice on the Dark Web not to go near Shop Direct because the investigators will be knocking on your door with the police. It was great for our directors to see that but sadly not everyone reads it!”
Mark argues that even if there’s no reply at an address, a letter through the door can have a deterrent effect. Whatever the precise number of arrests resulting from Shop Direct’s efforts, the company has had the team for some years and clearly believes the investment is worth it.