Consumers believe fraud more common online, says study

Consumers feel more vulnerable to fraud online than when shopping or conducting financial transactions in person, a new study shows.

Consumers feel more vulnerable to fraud online than when shopping or conducting financial transactions in person, a new study shows.

While 90% of people regularly make a purchase or conduct a financial transaction online, nearly two in three (65%) believe that more fraud occurs when conducting transactions online than in person.

Research found that nearly half of smartphone or web-enabled computer users have encountered a fraud protection system that unnecessarily delayed or denied their transaction, the survey found.

Problems of this nature can cause consumers to change their shopping behaviour, according to the poll commissioned by American Express fraud prevention and risk management provider Accertify.

Of those who have experienced transaction delay or denial, 48% said they would penalise the business responsible by moving or considering moving their business to a competitor.

Consumers are conducting the most online transactions in the retail industry (79%), followed by banking and finance (70%), online auctions (50%), travel (43%), entertainment (34%) and the music and film downloads (33%) industries.

And online shoppers find computers more trustworthy than tablets or smartphones when making online purchases with 92% of respondents perceiving their computer to be the most secure device for online shopping whereas only 6% trust smartphone and 2% trust tablets.

Accertify vice president EMEA at Amex Mike Long said: “It’s crucial that businesses acknowledge that disappointing an online customer can have costly repercussions.

“Not only will you be losing revenue from future transactions, but your competitors are going to benefit at your expense.

“Instead of manually reviewing every suspect transaction, merchants need to implement an automated fraud prevention system that is easily adjustable to account for emerging fraud threats and customisable to changes in their business. This way, they can ensure that legitimate customers avoid the transaction delays or denials that drive them to transact elsewhere.”

As more commerce continues to move online, understanding consumers’ security concerns and preferences relating to conducting business online will be crucial in maintaining a competitive edge, the company claims.

Long added: “Consumers are increasingly thinking about security in choosing where to take their business. Effective fraud prevention programmes are quickly becoming an integral part of online merchants’ business models to appeal to the tech savvy, tablet-toting consumer.”