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Online fraud is a growing problem for online retailers and brands that are on the frontlines of the online shopping explosion, says a survey of small, medium and large companies involved in e-business activities. The survey, conducted for electronic commerce transaction services developer and provider CyberSource, says that continuing consumer fears, potential backlash on brand image and other negative factors affecting sales and productivity underscore the need for effective technology solutions and anti-fraud messaging.
Some 75% of the merchants surveyed consider fraud a problem. And even though fraud is considered an important issue, 41% of the merchants-four out of 10-do not know that they are held responsible when online fraud takes place. Given the widespread concern about fraud and its impact on e-business in general, there clearly exists a need for more education and information, says San Jose, Calif.-based CyberSource.
With the lucrative holiday season approaching, online fraud has a special significance, the survey says, with 74% of the merchants believing that fraud will increase this year. It adds that 52% expect revenue to increase over last year and the average increase anticipated is 68%. In addition, 72% believe that sales would increase if online shoppers were not concerned about fraud.
Last year, there were $500 million in fraudulent sales made through both physical and virtual channels.