Credit card fraud on the Internet reached $700 million last year, 1.14% of the total $61.8 billion that consumers spent on retail purchases, travel and event tickets, reports Gartner Inc. The year before, fraud totaled $499 million, 1.13% of sales.
Credit card fraud on the Internet reached $700 million last year, 1.14% of the total $61.8 billion that consumers spent on retail purchases, travel and event tickets, reports GartnerG2, a research division of Gartner Inc. The year before, fraud totaled $499 million, 1.13% of the total $44.2 billion that consumers spent. Gartner says the fraud figure is 19 times higher than offline fraud.
GartnerG2 reports that a new survey shows adult consumers in the United States are beginning to adopt credit card company solutions designed to protect against online fraud. A Gartner Internet survey of more than 1,000 adult U.S. online consumers, conducted in January, showed that 5.2% of respondents were victimized by credit card fraud in 2001 and 1.9% were victimized by identity theft.
More than 18% of respondents said they are are attempting to fight fraud by embracing two new credit card protection systems: Visa`s Verified by Visa and MasterCard`s Universal Cardholder Authentication Field standard and Secure Payment Application.
"After years of missteps, the credit card companies have finally got it right with their consumer authentication technology. Consumers are willing to adopt the easy-to-use password-based applications," said Avivah Litan, vice president and research director, GartnerG2.
"Other security schemes, including public key infrastructure, smart cards, that the credit card firms also support, and disposable card numbers, receive far less consumer support," Litan said. "Most consumers are unwilling to take the extra steps required to use PKI, as the failure of the previous MasterCard/VISA sponsored PKI-based Secure Electronic Transactions standard clearly demonstrated. Consumers also believe the new Visa and MasterCard systems offer better protection than PKI or smart cards, showing that branding is far more important than technically robust security schemes."
Gartner says the credit card companies next need to provide incentives to merchants to adopt anti-fraud technology. ”The credit card companies should back up their belief in these systems by lowering fees for all merchants who support them," Litan said. "This would guarantee even more widespread adoption."