Internet fraud continues to be a problem, as ten per cent of the online UK population are reported victims

News by Dan Raywood

The problem of online fraud has led to eight per cent of victims believing that they will never receive all of their money back.

The problem of online fraud has led to eight per cent of victims believing that they will never receive all of their money back.

The figure has doubled over the last 18 months, research by VeriSign Authentication, now part of Symantec, found that British adults are losing almost twice as much money to online fraud in comparison with six months ago.

Although the number of fraud victims remained stable, with ten per cent of the online UK population suffering at the hands of cyber criminals in the last 12 months, the average amount lost to online fraud now stands at £697 per victim, compared with an average of £352 in March 2010.

Fran Rosch, vice president of trust services at the Symantec enterprise security group, told SC Magazine that he did feel that online fraud had gotten worse and was impacting people, with banks and providers now passing costs on to their customers.

He said: “In the past, banks and providers would cover it with fees so absorb the cost of fraud, but they are not able to process as much without fees and we are seeing some are not passing it on to their customers and some are charging for not being protected.

“Some companies do insurance against fraud and identity theft but you need to read the small print. But they are looking for added credit facilities and they know that the customers are willing to pay for it.

“New e-commerce sites are not used to absorbing cost and pass it on to the customer, but it could be a silver lining to get people to be more secure.”

The research in the online fraud barometer also found that the number of people claiming only to shop from ‘safe sites' has fallen from 82 per cent to 80 per cent in the last six months.

Previous VeriSign research found over a quarter of those polled (28 per cent) said that ID theft, fraud and not trusting the site they are on are the biggest factors holding them back from buying online.

Asked if people understand what a safe site is, Rosch said: “People think a site is safe and are looking for the usual clues and the professionalism of the site, as big companies will have a professional site. Website owners have got to get to a culture to help the users feel confident.”

Julian Lovelock, director of commerce markets worldwide at ActivIdentity, said: “It is frightening to see that fraud losses have doubled in the last six months, especially as the end of the year draws to a close and the very real VAT increase becomes a reality for online shoppers. The increased shopping habits online is now a rich picking ground for cyber criminals, as the internet continues to grow.

“Cyber criminal activity has evolved and as a result the monetary attraction for compromising a computer to steal banking details has also evolved with this. We're now seeing malicious emails and rogue or compromised websites become more difficult for the average consumer to identity.

“Online shopping (e-commerce) has become the weak link in the chain, which may explain the increased fraud in this area. Banks absolutely have a role to play in educating customers to be alert to the risks and working with authentic merchants to provide a convenient and secure online shopping customer experience. Educating consumers of the risks and providing the appropriate tools to mitigate against compromised sites is imperative.”


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