More money lost through online fraud

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While the percentage of money lost through fraudulent transactions has stayed the same, the increase in consumers buying online has led to large losses in the retail industry.

So claims CyberSource’s sixth annual UK online fraud report, which claims the figure of online revenue lost by companies stayed pretty static at 1.8 per cent - which equates to roughly £400,000.

“As you can see this is certainly not small change we are talking about," Dr Akif Khan, author of the report, told IT PRO in an interview.

The major issue flagged by Khan was the processes used to check whether transactions are fraudulent or not by online merchants.

“Merchants will have some kind of internal processes to deal with potentially fraudulent transactions, said Khan. “Typically… automated rules will help immediately spot the good transactions and bad transactions and those rules will lead to some accepted and some rejected.”

Yet 70 per cent manually review transactions and teams cannot cope with the load.

“The problem is merchants are too reliant on manual review [and] it costs money paying headcounts. Yet whilst 69 per cent of merchants said they expected online revenue to grow in year ahead, 67 per cent didn’t think they were going to increase manual review teams," Khan added.

"Merchants need to get a lot smarter.”

The report also revealed that a third of the respondents let 90 per cent of the transactions go through meaning automated rules were sending unnecessary transactions and taking up a lot of the stretched teams’ time.

“There needs to be a balance of both automated and manual for the process to work,” Khan added.

Although seemingly negative on the merchant side of things, there were positive signs in the consumer space when it came to awareness of online security.

“On the consumer side I think [the report] is more positive," he said. "There are more consumers shopping online and the [security] message is getting through, but these things do take time.”

Charlie McMurdie, Detective Superintendent of the Police Central e-Crime Unit (PCeU), offered advice for those who regularly do their shopping online.

“Know who you are dealing with,” said McMurdie in an interview with IT PRO.

“We always say check manufacturers website to make sure who you are buying from as many will list other genuine suppliers. Also If you are paying for goods, say something over £100, consider using credit card to protect your purchases. Don’t give any details like PIN or passwords to anyone and also protect your computers with the latest anti-virus software.”

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