Survey Reveals Online Fraud Concerns

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 ecommerce 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.