Online fraud losses double in six months

UK adults are losing twice as much money through identity theft and other forms of online fraud than they were six months ago, despite fraud victims remaining roughly the same at 10 per cent of the online population, according to the latest VeriSign Online Fraud Barometer.

The online security firm found that the average amount lost to online fraud now stands at £697 per victim, compared to £352 in March. A total of 71 per cent of British online fraud victims suffered financially, and 15 per cent claimed that they lost over £1,000.

There were also signs that credit card companies and financial institutions are growing increasingly unwilling to bale out victims of online fraud.

The number of victims who have been fully reimbursed after suffering online fraud fell by six per cent since March, from 88 to 82 per cent.

In addition, eight per cent of those who had been reimbursed only partially or not at all believe that they will never receive all of their money back, double the figure from March 2010.

Vice president for VeriSign Business Authentication, Fran Rosch, argued that the industry cannot agree whether online fraud and falling levels of consumer trust are a perceived or real problem.

"This survey indicates that both are true," he said. "There is real money being lost as a result of identity theft and online fraud, and there is a missed opportunity for businesses because a trust deficit is making people more resistant to taking advantage of online services.”

Rosch added that, although e-commerce firms are enjoying much success, they could be doing even better if they paid more attention to online fraud prevention.

"There is a competitive element. If you can solve the trust and fraud problem you have an opportunity to take more than a fair share of growth by using security as a selling point," he said.