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January 21 2008
Fraud management costs £160k per year
CyberSource’s 2008 UK Online Fraud Report show that the average expenditure on fraud prevention is increasing dramatically and annual expenditure for a medium sized company is as much as £160,000 per year
An early draft of CyberSources’s 2008 UK Online Fraud Report has come into IR’s hands and it makes depressing reading. For all the continued growth and optimism in the online retail industry, one message has come through loud and clear from merchants in CyberSource 2008 UK Online Fraud Report. Efforts to tackle fraud are being hampered by a lack of co-ordination from card companies and the police, and merchants are asking for a central body to co-ordinate fraud reports.
According to the report e-tailers have complained about the quality of information from the card schemes and acquirers, and a lack of interest and inconsistent approach from the police.
The suggestion from some is for a single, independent body to track organised fraud efforts, share information, direct police efforts, liaise with the card schemes and lobby the government on improving policy.
Merchants continue to invest heavily in managing the problem of fraud. Annual expenditure for a medium sized company is as much as £160,000 per year - a significant increase on last year's estimates (typically less than £100,000) - rising to £265,000 for large businesses and over £500,000 for very large businesses.
The key anti-fraud tools remain Address Verification Service (AVS) and Card Verification Number (CVN), but despite confusion over the deadlines and penalties for non-adoption, the uptake of Verified by Visa and MasterCard SecureCode has been dramatic in the past twelve months. More than 70% of merchants now support these programmes and are calling for more effort from the card schemes and banks to educate consumers about their value.
Despite the continued presence of online fraud scare stories in the media, 30% of adults who shop online have not changed their habits to improve security. Worse, 4% of adults have stopped shopping online because of the fear of fraud. The majority of online shoppers take the most basic precautions but there is still some way to go to secure the shopping experience for all. Opinion on who holds the responsibility for securing online shopping is mixed: just 4% believe the police are responsible, with retailers, ISPs and the card schemes sharing the burden in most respondent's view.
Do you spend £160k+ a year on fraud protection? And do you feel the same way about the police and credit card manufacturers? We’d like to hear your views.
Fraud crimes are preventable.
Why would anyone get tempted to do identity fraud if they had to personalise their signatures on agreements, cheques, money withdrawal notes etc. with ID stickers?
Why would anyone get tempted to do mail order fraud when they have to personalise their signatures on receipts with ID stickers?
Why would anyone get tempted to do ATM fraud via use of stolen and skimmed cards when they would need security code stored on ID KEY to activate the transaction?
Proposed ID KEY can be treated as a reliable international ID card because it will personalise signature and PIN number to only the right individuals.