Current economic conditions may increase fraud

41st Parameter announced survey results from a recent event sponsored by the Merchant Risk Council (MRC). Findings indicate fraud and risk management experts from leading e-commerce companies believe current economic conditions will yield increased online fraud activity this holiday season. When asked about their top fraud fighting challenges, 67 per cent identified fraud rings and botnets as key concerns.

Results highlight how online fraud continues to be an issue across most e-commerce organisations. Universal sentiment clearly indicates fraudulent activity tends to follow particular patterns and preys off current events.

When asked: “How do you expect current economic conditions to impact attempted online fraud at your company this holiday season?” 84 per cent of respondents indicated they anticipate a slight or substantial increase in fraudulent activity.

When asked: “What do you see as the biggest challenge when fighting online fraud?” 67 per cent (two-thirds) of the respondents stated increased fraud ring activity and botnets are of chief concern.

An alarming 30 per cent cited lack of funding to secure better fraud fighting technology as their primary challenge.

Results from other survey questions were inconclusive, including 50 per cent responding they expected an increase in online sales this holiday season, as opposed to the other half of respondents stating they anticipate flat or decreased comp sales.

As for CyberMonday, a mere 11 per cent expected a significant percentage of holiday sales activity to come from one day, whereas the majority anticipate a steady distribution, including fraud attempts, throughout the holiday season.

41st Parameter conducted the survey during a joint webinar with the Merchant Risk Council on November 19, 2008, which included two FraudNet customer panelists. There were over seventy-five loss prevention specialists in attendance, comprised mostly of MRC members, representing over forty of the top online merchants.