Identity Fraud Management: A Qualitative Study into the Managerial Practices in E-tail Sector

Abstract

E-commerce has offered many opportunities to business firms to minimise their operational costs, enhance the customer base and develop better customer relationships. These opportunities have also created some challenges, especially those related to identity frauds. Therefore, this study aims at understanding identity fraud management and analyses existing managerial practices at large e-tailers to suggest improvements.
To attain the objectives of this study, the qualitative approach of data collection was adopted. The interview method of data collection helped to get in-depth information about the context under study. The case study research approach was chosen to investigate the what, how and why of the issues and practices of identity fraud management. The data were collected at three large e-tailers based in the UK, in the course of 33 semi-structured interviews. For the analysis, thematic approach was adopted and the results were processed using single and cross-case analysis.
The findings revealed that identity fraud was one of the biggest challenges for e-tailers, as they are losing a significant amount of their revenues. Various types and methods of identity frauds have been explored. The results show that the case firms have the process of managing identity frauds, and the stages of fraud management suggested by Wilhelm (2004) were present. It was also found that e-tailers prioritised the technological aspects of fraud management, while the developing the skills and awareness of their staff was not given required focus, which may be one of the possible reasons for the existing deficiencies in fraud management. In fact, this study has found that human factor is a critical aspect of fraud management. It has also been established that customer education is not carried out effectively, despite the fact that identity theft mostly occurs at the customer side. A more active and explicit stance against identity fraud is recommended. However, because the e-tailers operate in a highly competitive environment, there is a trade-off between putting up extra security layers and the ease for customers for making a purchase, making identity fraud management ever more challenging for them.
Present study contributes to the body of literature by understanding identity fraud management and analysing current managerial practices at large e-tailers. Reflecting on the theoretical and empirical data, e-tailers are forwarded some novel practices for better management of identity frauds. Additionally, e-tailers are also suggested improvements in existing managerial practices. This study may help e-tailers to effectively manage identity frauds, which will result in reduced fraud losses, better firm image and favourable customer relations and offering the society a secure environment for online shopping.
Finally, a conceptual framework has been suggested for effective management of identity frauds in e-tail context. Managerial practices are suggested and guidelines are given at each stage of the framework for effective management of identity frauds.