A new survey by business information firm Experian brands the internet as “the first choice for thieves”, revealing fraud levels of up to 40%. The study also found that 90% of fraud cases go unprosecuted, and 99% of fraudulent sales are not even reported by websites.
The report, based on internal investigations of companies suffering from fraud, reveals that 40% of these admit to being the victims of serial fraudsters, while two-thirds admitted that it took over a month to detect the crime.
“In another age [the internet thieves] might well have become petty shoplifters or pickpockets”, said Richard Fiddis, Experian’s chief operating officer. “The police seem to be unable to deal with them and the average value of an individual fraudulent transaction is so low that it is expensive for a retailer to garner the evidence to prosecute”.
This threatens online retailers as well as consumers. The report alleges that web businesses pay higher levels of chargeback (paying the cost of credit card purchases to the consumer) than in bricks-and-mortar retailing.
“The total level of fraud is growing so fast that it is eating into any price advantage established retailers get from selling over the web”, warned Mr Fiddis.
News source: Financial Times