The NEXT Directory website has lost millions of pounds due to identity fraud.
Online fraudsters may have cost NEXT up to £6m. Some of this is down to people ordering items they didn't intend to pay for. There have also been cases of theft of existing customers’ accounts, setting up of bogus accounts, and hijacking home addresses.
A year ago, NEXT Directory made changes to the credit screening of new applicants. Many fraudsters were prosecuted in an attempt to tighten its credit controls. NEXT, which is now largely web-based, is expecting low second half sales as it attempts to solve the online fraud problems and tighten its credit controls.
Greg Day, security analyst at McAfee said, "This is a graphic example of how a breach in information security can impact both a business and its customers.
"The announcement today is however just the tip of the iceberg, as organisations across the globe continue to evaluate and look to implement security policy to protect against external and internal threat."
NEXT Directory sales are said to be down 2.9 percent in the past six weeks, a drop partly down to people ordering goods online using false credit details. However, recent interest rate rises and competition from rival high street stores have also been named as a cause of the sales decline on the Directory site and in the NEXT shops.