Online fraud set to rocket to £1.5B (A$3.6B)

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Online fraud set to rocket to £1.5B (A$3.6B)

Cyber crime is costing the e-commerce industry as much as £580 million (A$1.38 billion) per year, with that figure set to rocket to £1.5 billion (A$3.6 billion) by 2010, latest figures show.

The research, carried out by Visa voucher firm, 3V and online retail industry body, IMRG, found that 64 per cent of online retailers have fallen victim to fraudsters.

It also shows that 36 per cent of internet merchants have suffered a rise in cyber crime activity since the introduction of chip and PIN on the high street – costing some businesses as much as five per cent of their annual turnover.

The report also reveals that 43 per cent of retailers believe the threat of fraud is becoming a greater concern by the day.

“The research highlights just how serious the problem of internet fraud has become for the online retail industry,” said Andrew McClelland, director of projects and marketing at IMRG. “While the industry is rapidly expanding it obviously provides a tempting target for cyber criminals.”

While 64 per cent of online retailers are boosting their website security, a fifth (21 per cent) feel the systems introduced in the past three years by payment providers are placing a large burden on the consumer.

“While some giant steps have been taken by the retail and payments industries in the last few years to combat the problem of card-not-present fraud, the impact it is having on some e-retailers is immense,” warned Kieron Guilfoyle, CEO of 3V Transaction Services.

IMRG figures predict that annual online sales could surge to £78 billion (A$1.8 billion) over the next three years, suggesting that by 2010 cyber fraud could cost businesses a whopping £1.5 billion (A$3.6 billion) per year.

In November, 3V launched its Visa voucher scheme in the UK in an attempt to boost online security. Customers can purchase and top-up the tokens from shops or on the web. They will be sent a randomly generated Visa number to their mobile phone along with security details. This creates a chip and PIN-style code for shopping online, without the need of a debit or credit card.
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