In a study involving 160 online UK retailers, figures from CyberSource’s second annual UK fraud survey show that while the issue remains unsolved, modern security tools can make the problem manageable. 65% of company’s surveyed had seen losses from online fraud stall or fall in the last twelve months. 16% observed that fraud has risen as a proportion of revenues. This contrasts strongly with public perception of the problems of Internet fraud: according to research carried out for the government’s ‘Get Safe Online’ campaign, one in five people in the UK rates Internet crime of greater concern than car theft or even mugging.
Nathan Jackson, managing director of CyberSource commented: “While fraud remains a problem, there is a clear disconnect between consumer feeling and retailer reality about the extent of online fraud. While retailers are investing heavily in beating fraud – often successfully according to our research – the public is being made to feel nervous about shopping on the Web. The online retail community needs to continue working to beat fraudsters, but while we should be promoting prudence we shouldn’t be scaring the consumer away from buying online.”
CyberSource’s inaugural 2005 report showed that online retailers feared a leap in Internet fraud driven by the introduction of chip and PIN to high street stores. Instead, the latest figures from APACS show that online fraud climbed by 5% in the first six months of this year, which is relatively low when compared to fraud growth rates in other sales channels.
According to the figures from APACS, the major growth has been in other forms of Card Not Present fraud against businesses that might lack the sophisticated anti-fraud technology employed by online retailers.
“Online retail is a rapidly growing sector in the UK economy, with our latest figures showing 38% growth in September, year on year. We need to ensure that consumers continue to be prudent when shopping online, but the fact is that online shopping is no more risky than heading to the high street,” commented Jo Tucker, managing director of the Interactive Media in Retail Group (IMRG).
The Second Annual CyberSource UK Online Fraud Survey was sponsored by CyberSource Ltd. The survey was conducted over two weeks in September 2005 and yielded 160 complete responses. The sample was drawn from a database of companies involved in electronic commerce activities. As an incentive to complete the survey, respondents had the opportunity to win one of three handheld games consoles.
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