A new scheme to help retailers fight online fraud will be in place by the end of the month.
As the growth of e-commerce leads to a boom in fraudulent online transactions, a system developed by the Interactive Media in Retail Group (IMRG), a trade association for e-tailers, aims to combat the shady shoppers.
Online shopping scams are costing UK e-tailers millions of pounds in stolen goods each month but, while there is strong protection for the consumer, there is little for the retailer.
James Roper, chief executive at IMRG, said: "The police don't have the resources to deal with the hundreds of fraudulent transactions or to chase up these criminals.
"The government's Consumer Protection (Distance Selling) Regulations 2000 have made it tougher for the e-tailer, as have delays in shipping and credit card clearance."
Internet fraud is carried out in a number of ways, including the use of stolen credit cards which have yet to be cancelled or 'buyers' giving false addresses or claiming not to have received the goods.
In the past retailers have shared information concerning this type of transaction, but it has been patchy.
The aim of the IMRG system is not to place a blanket ban on certain cards or customers, but to alert online retailers to potentially fraudulent transactions far more quickly.
It does this by establishing a history of the online buyer on a database accessible only by IMRG members.
"We are implementing what we call a 'warm list' which allows retailers to share information about fraudsters," said Roper.
"A retailer that has experienced fraud or attempted fraud enters the card number, first line of the address, postcode and fixed line telephone number during the transaction."
This might not help the original e-tailer but could stop others falling foul of the same scam, because the criminals tend to communicate with each other and hit as many e-tailers as possible before they are detected.
The shared 'negative' file developed by IMRG and Cybersource, an online payment and fraud solutions and services provider, can act as a standalone service or be integrated as part of a broader fraud screening service using other checks.
These includes the Visa Address Verification System which allows retailers to check that the registered credit card address and delivery address are the same.
The IMRG system also ensures that all information is stored in compliance with European Union rules on data protection.
"We are allowed to store data if there is reasonable suspicion of fraud," said Roper. "However, the data will probably only be held for around three months unless a retailer makes another entry against that person."
IMRG's aim is for the service to be up and running by the end of this month, in time to protect merchants in the run-up to Christmas.
UK online shopping during the festive season is expected to generate more than £1bn per month.
The goal is to get most UK e-tailers into the scheme, making the database as comprehensive and effective as possible and reducing costs by spreading the load.
In this way, IMRG hopes to make e-retail crime so unattractive to fraudsters that they will be driven elsewhere.
Dust storm on Titan only the third Solar System body where such storms have been observed
New technique could enable quantum computers to scale-up to millions of qubits
Systrom and Krieger taking time off "to explore our curiosity and creativity"
Comcast's £29.7bn winning bid more than twice the £13.7bn Rupert Murdoch valued Sky at just eight years ago