Fraudsters Siphon $3 Billion from eBiz
Results of the eighth annual CyberSource Corporation survey of e-commerce fraud, released yesterday, shows that U.S. merchants will lose as much as $3 billion in revenue to fraud in 2006, up from $2.8 billion the year before. The good news: As a percent of revenue, fraud losses will be slightly less this year — merchants expect to lose 1.4 percent of revenue, down from 1.6 percent last year.
Overall, merchants say 1.1 percent of accepted orders later turn out to be fraudulent. In response to fraud risk, more merchants than ever before are reviewing some orders manually. Eighty-one percent of merchants in the sample now conduct manual reviews, compared to 73 percent last year.
In response to growing fraud losses and ever increasing e-commerce volume, online sellers are turning to tools and systems that will automate and streamline fraud-management. Overall, the use of anti-fraud tools grew 14 percent from 4.2 to 4.8 tools used per merchant. The largest bussineses, those selling more than $100 million online annually, average nearly eight tools.
Photo by clipartheaven.
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