Survey Reveals Online Fraud Concerns

Allison Howen — Wed, 21 Sep 2011 15:30:00 GMT

According to a new survey, one-third of consumers claim that they will make more purchases online than in stores this holiday shopping season, but many are wary of online fraud.

The “Mobile Payments and Online Shopping Survey of U.S. Consumers” was conducted by ThreatMetrix, a provider of cloud-based fraud prevention solutions, and The Ponemon Institute, an independent research company. According to the survey, 53 percent of consumers have some concerns about online fraud, while 26 percent have serious concerns about it. Additionally, 43 percent claim that they have been a victim of online fraud.

With more avenues such as mobile and tablets through which consumers can shop online this year, merchants must make sure their sites are secure in every aspect.

“While consumers continue to show a preference for the convenience of shopping and browsing online, their concerns about becoming a victim of online fraud is also growing,” says Bert Rankin, vice president of marketing, ThreatMetrix. “With mobile thrown into the shopping mix, which is even more apparent this year, consumers and retailers alike need to be well equipped against fraudsters in every possible channel.”

Shockingly, nearly one in three consumers believe that fraud is less likely to happen on a smartphone or tablet than on a desktop or laptop. Additionally, even more of the “elite” respondents, at 39 percent, think that fraud is less likely on a smartphone or tablet. Elite respondents are defined as consumers that are extremely active users of the Internet.

But should consumers have this sense of security when it comes to mobile and tablets? According to senior fraud and risk analyst from Aite Group, Julie Conroy McNelley, malware is a big business that is growing rapidly. Furthermore, online transactions go two ways. Although a consumer may think they are taking precautions, the merchant that they are purchasing from must also be taking precautions to secure private information.

“Mobile, in particular, is difficult to protect from fraud,” says McNelley. “With around 4,000 different device types to secure, it’s often a daunting task. On top of that, few consumers are using anti-virus or anti-spyware software on their mobile devices. Mobile, just like more traditional e-commerce transactions from a desktop, has the potential to become a hotbed for fraud.”

So how can merchants ease their customers’ fraud fears before Cyber Monday? Aside from making sure their site is as secure as possible, 84 percent of respondents say that merchants can ease their fears this holiday season by communicating a commitment to protect consumers against online fraud.

Study Reveals Surprising Perception of Online Fraud

Linc Wonham — Mon, 16 May 2011 16:00:00 GMT

A new joint study from ThreatMetrix and the Ponemon Institute explores consumer sentiment surrounding the Web industry’s ability to safeguard their personal information online.

Results across four industries showed that consumers are most confident in banks, followed by credit card and payment processors, and then social networks. Consumers believe that online businesses are the least reliable at protecting users’ personal information.

“It’s logical that consumers should have the most confidence in the banking industry’s ability to protect their information online, as banks have a responsibility to protect their customers’ funds,” said Reed Taussig, president and CEO of fraud-prevention firm ThreatMetrix. “Social networks, however, surprisingly, have a higher consumer confidence ranking than online businesses in regards to protecting personal information. That represents a problem for the e-commerce industry, which relies on secure online transactions as the foundation of their business model.”

The survey found that the perception of a company’s ability to prevent fraud weighs heavily in a consumer’s online decisions. Three in four consumers said they would not do business with an online merchant if they had doubts about the site’s security measures. Eighty-eight percent said the same of banks or credit card and online payment processors, and 56 percent for social networks.

“Banks, online businesses, social networks and payment processors are all targets for fraudsters who phish their accounts for emails and passwords,” said Taussig. “Yet when you bring e-commerce transactions into the picture, consumers are still very wary about the security of that data. Banks understand the importance of communicating these fraud prevention measures, which online businesses must also do. It’s the first step to increase that level of confidence to the point where a consumer is willing to complete a transaction.”

Eighty-five percent of the survey’s respondents said online merchants, banks, social networks and payment processors should be more aggressive in preventing fraudsters from stealing consumers’ information. Similarly, 80 percent believe that these industries should leverage technology to improve authentication of consumers.

Visit Consumers’ Reaction to Online Fraud for the full results of the study.

'Net Features : ponemon institute

Survey Reveals Online Fraud Concerns

Study Reveals Surprising Perception of Online Fraud