The Facts About Online Fraud
By Pete Thiruselvam

The MSNBC article had a blaring headline, "One in every 20 consumers has been the victim of credit card fraud in the past 12 months and one 1 in 50 has been the victim of identity theft." Actually, it was 5.2 percent of every 1000 online adults in the United States were victims of the fraud and 1.9 percent of the people were victims of identity theft---but that’s nitpicking the numbers. Importantly, the victims of identity theft didn’t know if their identity was stolen online or offline. Either way, it is scary to know that online thieves stole more than $700 million dollars. This loss of 1.14 percent of total online sales means that online fraud was 19 times the dollar numbers of offline fraud. This finding was done by a recent survey by Gartner Inc.

One point to remember is that online sales loss doesn’t only happen in actual fraud cases but also when it is a perception of fraud. For example, often some of the larger e-commerce sites have a sales rejection rate of 7 percent because of suspicious transactions. Furthermore, the average rejection rate is about 5 percent. This kind of news is of concern especially since e-commerce is back on the rise. As merchants find this good news a green light to sell more products and invest in online sales, crackers see it as a broader avenue to cheat consumers.