E-retailers leave themselves wide open to fraud, survey says

Online retailers are an easy target for fraudsters, with more than 97% hit by credit or debit card fraud during the past year, research claimed today.

Fraud in which a lost or stolen card is used to buy things via the internet or telephone cost the retail and banking industry (pounds) 95.7 million in 2001. But despite this 28% of retailers are still using only manual checks, such as confirming that a card has not been reported stolen, before authorising an online transaction, according to information group Experian.

Nine out of 10 retailers who sold products over the internet said their online revenue had risen in the past year, but they were spending only 1% to 5% of their IT budgets on security.

The group also found that in almost half of all cases it takes retailers up to four weeks to be informed of a fraud, and in 48% of these cases more than one transaction was carried out on the site before detection.

About 80% of retailers said they thought using a system to verify a customer's name and address would be an effective way to stop stolen cards being used, while 83% said they thought online sales would rise if consumers were not concerned about fraud.

Gareth Jones, fraud products director at Experian, said: "Our survey illustrates how important online trading is, yet more than 97% of online retailers are being affected by online fraud and bearing the brunt of a very expensive problem".

Copyright 2002
Provided by ProQuest Information and Learning Company. All rights Reserved.