Fraud hits U.S. e-commerce for $3.6 billion
By Erina Lin, Friday 23 November 2007 at 16:15 :: General :: #898 :: rss
U.S. e-commerce will lose $3.6 billion to fraud in 2007, up 20 percent over the previous year, according to a CyberSource survey.
Online merchants said they would lose 1.4 percent on average of their revenue to fraud in 2007, the same as in 2006. However, due to the growing of e-commerce, it means an increase in dollars lost.
According to CyberSource, around 1.3 percent of accepted orders in 2007 will end up to be fraudulent, up from 1.1 percent in 2006.
More than 4 percent of online orders placed in the United States and Canada are rejected due to suspicion of fraud.
CyberSource pointed out that chargebacks may represent only half of the actual impact of fraud, because more merchants are spending time and money reviewing transactions for potential fraud.
Merchants surveyed said they were reviewing 27 percent of their orders in 2007 for fraud, up from 23 percent last year. About 75 percent of those reviewed orders were approved as legitimate.
Merchants said that orders from outside the US and Canada were 2.8 times more likely to be fraudulent than those placed in North America, eMarketer reported.
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