Resellers have been urged to develop tighter and more cohesive fraud management processes as online fraud continues to rise.
The fifth annual UK Online Fraud report from payment management firm CyberSource found that 51 per cent of online traders are expecting to grow their business this year. This is down from 80 per cent a year ago and only one in five expects to grow revenue by upwards of 20 per cent.
Thirteen per cent of respondents expect to lose upwards of five per cent of their revenue to fraud this year. A further 24 per cent anticipate fraud will cost them between one and five per cent of revenue during 2009.
This year is the first time fraud has been surpassed as traders’ worst fear, with 54 per cent citing theft of customer data as an area of real concern.
CyberSource’s head of client and technical services, Akif Khan, said: “This is partly a reflection of [coverage] in the media recently. It is not good to have your business splashed over the press as not being able to look after customers’ data.”
Khan claimed many firms would benefit from improving the efficacy of both manual and automated fraud management processes. “One of the things businesses need to focus on is increasing efficiency so that good orders are not marked for review.”
He also claimed businesses often lack the expertise to fine-tune automated processes when necessary. “Many see putting in an automated review system as a single project.”
Khan advised firms to address fraud in a holistic way. “This year fraudsters will migrate into call centres and merchants will see a large increase in fraud in that area,” he said. “But many do not have a cohesive approach to tackling fraud.”
Last year saw the formation of the dedicated Police Central e-Crime Unit. In the report, detective superintendent Charlie McMurdie, wrote: “E-crime is a major problem and cannot be tackled by law enforcement alone. To address the problem successfully we need the continued support of industry, through expertise, information, and most importantly, a willingness to come forward and share information.”
Credit reference agency Graydon launched the IT Reseller Intelligence Network last year to encourage VARs to share information on fraud. Head of intelligence Mark Ancell said: “Online fraud is still growing massively; as hard times hit, fraud rises. Resellers do have good processes in place, but fraudsters are often one step ahead.
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