Internet fraud dropping, despite online sales growth

Online merchants are becoming more aware of how to deal with fraud

Internet retailers are reaping the rewards of higher levels of online spending as internet fraud drops, it has been claimed.

Levels of internet fraud dropped by up to 15% last year, despite a 40% rise in online spending at Christmas, according to fraud-prevention firm Early Warning. The company said such a significant decrease in online fraud was not anticipated.

“This is really an unexpected and encouraging first in internet fraud statistics,” said Andrew Goodwill, managing director at Early Warning.

“As e-commerce goes on rising, we are used to corresponding increases in fraudsters activities to capitalise on it. As the number and value of sales has risen so sharply, fraud – as a proportion – is definitely down.

“I am encouraged by these figures and hope this is not just a blip but the start of a downward trend for internet card fraud.”

Goodwill said a possible explanation for the drop was the growing awareness of internet merchants of the fraud risks they face and the subsequent measures they were putting in place to tackle fraud.

In a separate survey by retail consultants Actinic, 75% of companies said they expected online sales to grow over the next year whereas just 25% thought there would be offline growth.

According to the survey, online stores reported a 96% increase in turnover during November and December compared to the same period in 2005.

© Crimson Business Ltd. 2007

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