A new study of Internet retailers, or e-tailers, released Thursday by The Worldwide E-Commerce Fraud Prevention Network found that while nearly half of e-tailers surveyed say online fraud is a "significant problem," the majority believe that fraud prevention steps can minimize risk.
The survey, which was conducted over the week of March 5 on the Network's Web site, found that 50 percent of those surveyed reported online losses from fraud of between $1,000 and $10,000. Nineteen percent said they had lost over $100,000.
Of over 1,000 members of the Network, 140 took part in the survey. The largest number of respondents thought fraud was a "somewhat significant" problem (36 percent), while only 10 percent found it to be the "most significant problem" and one percent said they never worry about it at all.
Regardless of how serious a threat e-tailers see fraud as, they are taking a variety of different measures to prevent it, and over 70 percent believe that such steps can minimize it, the study found. Seventy percent use address-verification systems to fight fraud, 54 percent follow up with their customers or use real-time authorizations and 43 percent employ after-the-fact fraud management, also called post-process fraud management.
The most widely-used tools correlated closely with the tools merchants said were most effective, with address verification listed as most effective by 68 percent of those surveyed, real-time authorization by 52 percent, card verification codes by 49 percent and customized rules by 42 percent.
The companies that responded to the survey are a diverse bunch in terms of revenue, with 45 percent listing annual revenue of over $1 million, 20 percent making between $100,000 and $1 million and 35 percent reporting under $100,000.
The Worldwide E-Commerce Fraud Prevention Network is a trade group made up of companies that conduct e-commerce which aims to reduce fraud and promote e-commerce. Members include Amazon.com Inc., American Express Co., Expedia Inc. and PricewaterhouseCoopers LLP.