Internet Fraud Report
An Internet fraud report: a brief overview of the current situation
Internet Fraud
Though small in relation to ecommerce turnover, Internet fraud
is serious — for the victims and for the reputation of the
industry. According to NCL, US Internet fraud losses amounted
to $6 million in 2001. Their breakdown: {1}
Online Auctions
|
70%
|
General Merchandise
|
9%
|
Nigerian Money Offers
|
9%
|
Computer Equipment
|
2%
|
Internet Access Services
|
2%
|
Adult Services
|
2%
|
Work at Home Plans
|
2%
|
Advanced Free Loans
|
1%
|
Credit Card Offers
|
0.5%
|
Business Opportunities
|
0.5%
|
Overtopping everything was e-auction fraud. Of the 31% of online
Americans (35 million people) who participated in online auctions
in 2000, 41% encountered problems. Checks were cashed without
goods being sent (or vice versa) and the average loss per victim
was $326. The obvious safeguards were not known or not used. Only
17% paid with credit cards and a mere 6% employed an escrow service.
{2}
A Gartner survey produced much higher figures. $700 million in
online sales were lost to fraud in 2001, representing 1.14% of
a $61.8 billion total. This was some 19 times that of offline
fraud, and 5.2% of 1000 online customers surveyed complained of
credit card fraud, and 1.9% of identity theft. Once again, many
customers had only themselves to blame — they were prepared
to adopt simple password-based applications and not employ the
more demanding PKI, smart-cards and disposable card-number systems.
{3}
Responses to a survey conducted at The Worldwide E-Commerce Fraud
Prevention Network's site reported 50% with fraud losses in the
$1-100,000 range, and a staggering 19% who had lost more than
$100,000. {4}
Retailers stand to lose more than customers. An Experian survey
back in 2000 indicated that, though UK online credit card fraud
was under 1% on most websites, it had reached 40% on some sites
for software, ticket sales and the household electrical goods.
Moreover, while customers were liable only for the first £50
of fraud, retailers had to cover the full cost of such theft,
with prosecution of offenders still difficult. {5}
Fraud Prevention
E-tailers are gradually adopting protective measures, though
more reasonable charging by credit card processing companies would
help. Some 70% of e-merchants adopt address verification systems,
54% follow up with their customers or adopt real-time authorizations,
and 43% adopt after-the-fact fraud prevention measures. {4}.
A good range of solutions is now available, and free papers can
be downloaded from the security companies concerned. {6} {7} {8}
{9}
Please note that this page is out of date, and that simple measures
exist to prevent or minimize Internet fraud. For more details
consider our ADVANCED GUIDE
TO ECOMMERCE, now in its eleventh edition, which contains a proper
Internet Fraud Report, with extensive listings on anti-fraud measures,
and what to do if you fall a victim of fraud or misrepresentation.
An overview . . .
- The Internet's most detailed guide to ecommerce: 185,000 words
/ 550 pages in pdf format.
- 160 reference sheets summarizing a particular aspect, with
advice and resources as appropriate.
- Over 3,300 resource listings grouped under 260 headings: each
hand-picked on its merits.
- Fourteen comparison tables in key product areas.
- A proven approach to planning ecommerce.
- Practical advice on improving sales and conversion ratios.
- An extended guide to pay-per-click and sponsored listings.
- Use of business blogs, advised and ill-advised.
- Practical security aspects: keeping yourself safe.
- Testing sites and ideas at negligible cost.
- Over 100 case studies, both general and dotcom failures.
- Notes on ecommerce strategies and use of the resource listings.
- Tutorials on AdSense, ePublishing, eBay, RSS feeds and commercial
blogging.
- Ten up-to-date surveys of ecommerce prospects worldwide.
- Insider information based on Internet research and our own
studies.
- Strategies to test customer behaviour and improve sales.
- Comes as an interlinked webpage ebook (2 Mb) and as a pdf
document (9 Mb). The one-time subscription covers both.
Click here for
a full contents listing of the current edition.
Our
$37.50 e-book comes with a 30-day, no-questions-asked guarantee.
If not fully satisfied, then simply email us for a prompt and
full refund. Material is continually being checked and extended,
and purchase includes free updates.
The e-book comes as interlinked webpage compilation for ready
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reading. The PDF document can be read on all platforms, but the
interlinked webpage compilation can only be read on Windows platforms
( Windows 98x, Me, 2000 and XP machines).
Our July 2008 update will include an extensive tutorial on using
the pay per click search engines.
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