Online banking cuts fraud and ID theft

Banking and paying bills over the internet could help to prevent one million cases of identity theft annually and reduce fraud by $4.8bn, new research has claimed.

A report from market research firm Javelin Strategy & Research challenges popular assumptions that internet transactions are less safe than paper-based ones.

The company argued that using the internet can protect consumers and businesses from two common types of identity theft: fraudulent opening of new accounts; and unauthorised use of existing accounts.

The most significant benefits, according to Javelin, come from online banking and viewing and paying bills.

By using this method, consumers and businesses eliminate common means of identity theft, such as stealing personal information contained in bills, bank statements, and credit card statements delivered by post, or in a signed, outgoing cheque used to pay a bill.

The information can more be easily obtained in the physical world than via secure websites, the study found.

In addition, Javelin said that consumers who view and pay their bills online are nearly four times more likely to monitor their transactions on a regular basis than those who wait for paper bills and monthly statements.

This earlier detection was found to have the potential to reduce identity theft by more than 18 per cent, by detecting and reporting fraud before further damage can be done.