Small retailers pass the buck for online fraud

The majority of consumers are suspicious of the security employed by small companies

Small online retailers risk driving customers to larger competitors because of a refusal to accept any responsibility for fraud, according to research sponsored by PayPoint.net.

Some 99 per cent of the 350 online businesses surveyed for the study did not believe they were liable for fraud on their site. The majority preferred to pass the buck to banks and credit card issuers instead.

More than a third laid the responsibility for dealing with online fraudsters at the door of banks, just under a quarter said that card issuers were liable, while 23 per cent said that payment service providers were responsible.

Separate PayPoint.net research suggests that this attitude could prove costly as 81 per cent of consumers are suspicious of the security employed by small unknown companies.

"Small online businesses lack the resources of their larger competitors but have an even greater interest in ensuring that customers have the safest possible experience," said Alessandro Hatami, managing director of PayPoint.net.

PayPoint.net recommends that small businesses buy its products to minimise the risk of fraud and to help build trust with their online customers.

The company also suggested comparing the IP address of the PC at the customer's actual location with billing and shipping addresses.