Online fraud losses are adding up, and consumers are taking action.
Some 5.2% of respondents to a recent survey conducted by GartnerG2 reported being victimized by credit card fraud last year and 1.9% were the victims of identity theft.
Making the matter even more urgent is the fact that fraud is occurring in greater volume online than offline.
Online fraud losses were 19 times higher, dollar for dollar, than from similar losses offline. Last year, more than $700 million in online sales were lost to fraud, or 1.14% of the total $61.8 billion in online sales.
To battle online fraud adult U.S. consumers spending money on the Net are beginning to use credit cards designed to protect against online fraud, according to GartnerG2.
More than 18% of respondents have used two new credit card protection systems: Visa’s Verified by Visa and MasterCard’s Universal Cardholder Authentication Field standard and Secure Payment Application.
The fees for Internet transactions remain higher for merchants at about 2.5% compared to 1.5% for in-store sales. However, Mastercard plans to attract merchants to its program by making issuers, rather than merchants, liable for its Universal Cardholder Authentication Field protected transactions in November. Visa has a similar plan scheduled for mid-2003.
“Consumers are interested in using these new security systems, which can significantly reduce online fraud,” said Avivah Litan, vice president and research director at GartnerG2, a research service from Gartner Inc., in a statement. “The credit card companies should, however, back up their belief in these systems by lowering fees for all merchants who support them. This would guarantee even more widespread adoption.”
The survey of more than 1,000 adult U.S. online consumers was conducted in January.
