New Study Challenges Online Fraud Beliefs

Fredrik Johnsen

According to the latest study by ActivMedia Research LLC (Peterborough, N.H.), online fraud is not as big of a problem as many perceive it to be. In fact, fraud was only considered a problem at 3 percent of the Web sites that responded to the study, “Real Numbers Behind E-transactions, Fraud & Security.”

"Online shopping gets a bad rap in the press, but most of the stories reported are anecdotal tales of companies that haven't put successful defensive measures in place,” says ActivMedia's VP of Market Research Harry Wolhandler. “Web businesses running proper screening of customer information are suffering very little, with average fraud losses held to just over 1%. Fraud control is clearly possible online, although many companies do not implement stringent screening and prevention measures. The specific types of products sold online may impact fraud levels more than the marketing channels through which they are sold."

The study also shows that 86 percent responded that online fraud was not a problem for their Web site.

The research indicates three in four Web sites experience no online fraud losses; fraud is more widely experienced by the same vendors through offline sales channels than through online channels.