Upcoming Courses

view-all

Upcoming Events

view-all

IPM Cracks Down on Coupon Fraud

Friday January 13, 2017 at 12:25pm
Fraud won't be tolerated

The IPM’s Coupon Council, formed over 20 years ago, and remains central informing to the industry on best practices for coupon and voucher distribution and redemption.  With a landmark case in December 2016, the UK saw its first successful prosecution for significant coupon fraud concerning ‘print at home’ style coupons.  The party was found guilty under the Fraud Act, Section 1, Section 7(1) along with charges of acquiring criminal property, and was sentenced to 24 months imprisonment, although suspended for 24 months.  The message from the Crown Prosecution Service is clear: fraud will not be tolerated.  

Cyber crimes are on the up and the coupon industry continually looks at ways of improving security. With industry leaders, Valassis, RMI and MRM presenting as expert witnesses in the case, the IPM Coupon Council has prepared updated coupon guidelines for print and digital to help safeguard brand owners and retailers. Since coupon fraud peaked at over £270K per month in 2013, the IPM’s Coupon Council has worked with key industry players to identify and halt fraudulent coupons.   With this and other measures coupon fraud has dropped now to under £20K per month.  One such successful cooperation has been with eBay who remove fraudulent coupons being sold on line – most recently in November over 20 high value coupons were removed within hours of notification, stopping in its tracks the loss of thousands to the brands and retailers involved.  

Coupons have changed much in recent years and whilst the standard EAN 13 barcodes on printed coupons still present the most secure method of tracking redemptions, fraudsters have become more accomplished in faking high face value coupons. Peter Kerr, CEO of MRM and expert witness in the recent fraud case, comments “Security is everything for clients. Making sure guidelines are followed helps reduce fraudulent activity. The recent case just highlights how well fraud detection is working and this court sentence shows perpetrators that they won’t get away with fakes anymore”.   Along with traditional printed vouchers and coupons, several types of digital execution now exist so the IPM advises that uniquely numbered coupons are used for digital coupons to prevent fraud. In new digital best practice, the IPM advocates that the usual clear consumer-driven guidelines should always be followed, making sure that the retailer processing the coupon understands the ‘real-time’ nature of many digital coupons or vouchers and the risk of redeeming anything that can’t be verified.    

IPM Coupon Council Chairman, David Tymm, CEO of digital voucher business i-movo, cites the industry guidelines as the way forward to set the right self-regulation and adhere to the CAP Code.   ‘Coupons are a great way for a brand to reward loyalty, encourage purchase and engage with consumers. It’s up to the industry to make sure that these important vehicles involving over 950 million transactions a year are looked after – the IPM remains central to fighting fraud in this sector to help promote effective marketing tools’ comments Carey Trevill, managing director of the IPM. ‘The IPM Coupon Council collaborates to ensure that the whole industry can act together.’  The IPM’s Coupon Council is represented by industry leaders in the processing field including MRM, i-movo, Quotient and brand owners such as Heinz. Education remains key to making sure brand owners don’t inadvertently fall foul of fraudsters. By sticking to tried and tested methods of delivery whether in print or digital mediums, risk is minimised across the board.  

Each week, the top five most fraudulent coupons are circulated with major retailers and between clearing agents. High face value coupons (over £2.00) are the most abused – often the type of voucher that is used by customer care departments. The IPM Coupon Council urges a review of these types of coupons and vouchers in the market place to ensure that all secure steps have been followed, all of which can be found on the IPM’s website.   It’s impossible to avoid 100% of fraud but taking steps to protect revenues is worthwhile.

Seeing coupon fraud peaking at over £3m few years ago, the collective efforts of the IPM’s Coupon Council Clearing Practices has seen this reduce in the past eighteen months, signaling a breakthrough for the battle against fraud.   With further warnings of austerity to come in 2017 and the announcement that household debt has risen again, vigilance in the industry is paramount to ensure we able to continue to reward through the use of coupons and vouchers and bring the letter of the law down on those who abuse it.  


 

For further comment on this article, please contact Carey Trevill at the IPM on 020 3848 0444 or email to careyt@theipm.org.uk.

» Categories: Self Regulation, Legal, Coupons