April 27, 2011, 4:30 PM

85% of web users worry that retailers are not doing enough to combat online fraud

A survey finds that most consumers want retailers to boost authentication methods.

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Online fraud is a growing concern among web users, according to a survey released today by the Ponemon Institute, a privacy research firm, and ThreatMetrix, a fraud prevention provider.

In a survey of 607 regular Internet users, 85% said they worry about becoming a victim of fraud; that is up from 80% who reported similar concerns in the team’s previous study. The study defines online fraud as consumer credit card scams, identity theft, spam, phishing and social engineering attacks that seek to obtain personal information account details under false pretext.

Respondents who were concerned about fraud said web retailers should take additional steps to prevent criminals from stealing consumer information and were willing to be identified by web sites they trust. Nearly 75% of respondents said they would allow a trusted online business to place cookies on their computers to automatically authenticate them, and 82% indicated that they want online businesses to offer alternative authentication methods if that did not work. “Consumers expressed much more willingness to share data like Internet Service Providers, computer serial number, type and make, rather than information like date of birth and telephone number,” says Larry Ponemon, chairman of the Ponemon Institute.

Additionally, 42% of respondents said they have been the victim of online fraud, but not many are reporting it, the study suggests. Only 19% of the victims notified the online businesses directly, while the remainder said they did not report the crime at all.

“A lot of fraudulent activity goes unreported today, making it difficult for online businesses to fully understand the prominence and seriousness of the problem,” says Reed Taussig, CEO of ThreatMetrix. “With a rise in online transactions and activities across devices, more needs to be done to educate online merchants, banks, social outlets and other businesses on how to decrease fraudulent activity.”

ThreatMetrix provides fraud prevention services to various online businesses, including book and music retailer Alibris Inc., No. 116 in Internet Retailer’s Top 500 Guide.

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