Many Consumers Think Online Fraud is a Growing Concern

Online fraud is a growing concern among web users, according to a new survey released recently by the Ponemon Institute, a privacy research firm, in conjunction with ThreatMetrix, a fraud prevention provider.

Results showed that 85% of survey respondents reported being worried and dissatisfied with the level of protection online businesses are providing to stop fraudsters today, which is up 5% from a 2009 Ponemon study that asked the same question. Forty-two percent of respondents, in fact, said they have been the victim of online fraud. Of those, 80% said they did not report the crime, however, and only 19% said they reported it only to the online business directly.

A lot of fraudulent activity goes unreported today, making it difficult for online businesses to fully understand the prominence and seriousness of the problem,” says Reed Taussig, CEO of ThreatMetrix. “With a rise in online transactions and activities across devices, more needs to be done to educate online merchants, banks, social outlets and other businesses on how to decrease fraudulent activity.”

Respondents who were concerned about fraud said web retailers should take additional steps to prevent criminals from stealing consumer information and were willing to be identified by web sites they trust. Nearly 75% of respondents said they would allow a trusted online business to place cookies on their computers to automatically authenticate them, and 82% indicated that they want online businesses to offer alternative authentication methods if that did not work.

Consumers expressed much more willingness to share data like Internet Service Providers, computer serial number, type and make, rather than information like date of birth and telephone number,” says Larry Ponemon, chairman of the Ponemon Institute.

WHAT ONLINE BUSINESSES CAN DO TO COMBAT FRAUD

Based on survey findings, consumers have a positive perception about companies that use authentication and fraud detection tools to prevent online fraud. Fifty-six percent of consumers even indicated they are ‘more willing’ to shop or browse an online business if they know that company is taking specific measures toward combating fraud. However, the majority of respondents stated a preference for companies to share information about their device for authentication purposes — as opposed to sharing personal information to verify their identity.

Some e‑tailers today are promoting ‘anti-virus’ or ‘secure transaction’ messaging online, when they should also be touting ‘anti-fraud’ messages as well,” said Taussig.

[Source:  "Consumers' Reaction to Online Fraud."  Ponemon Institute/ThreatMetrix.  26 Apr. 2011.  Web.  29 Apr. 2011.]