Study Says Online Fraud is On the Rise
More than $700 million in online sales were lost to fraud in 2001, representing 1.14 percent of total annual online sales of $61.8 billion, according to the study, which was released yesterday.
Online fraud losses for 2001 were 19 times as high, dollar for dollar, as fraud losses resulting from offline sales. The study showed that adult consumers in the United States are beginning to adopt credit card company solutions designed to protect against online fraud.
An Internet survey of 1,000 adult U.S. online consumers, conducted in January 2002, showed that 5.2 percent of respondents were victimized by credit card fraud in 2001 and 1.9 percent were victimized by identity theft (although respondents do not know whether the theft occurred online or offline).
More than 18 percent of respondents are attempting to fight fraud by embracing two new credit card protection systems: Visa's Verified by Visa and MasterCard's Universal Cardholder Authentication Field standard and Secure Payment Application
"After years of missteps, the credit card companies have finally got it right with their consumer authentication technology. Consumers are willing to adopt the easy-to-use password-based applications," said Avivah Litan, vice president and research director, GartnerG2.
GartnerG2 is a research service from Stamford, CT-based Gartner Group.