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Ponemon/ThreatMetrix Study Looks at Concerns about Online Fraud

A report released by ThreatMetrix and the Ponemon Institute says that 85 percent of the respondents in the survey think that online fraud prevention measures aren't up to snuff. This is up from 80 percent in 2009, in the last iteration of the Ponemon study that asked the same question. Additionally, 42 percent said they had been victims of online fraud, of which only 20 percent reported the incident.

“A lot of fraudulent activity goes unreported today, making it difficult for online businesses to fully understand the prominence and seriousness of the problem,” said Reed Taussig, president and CEO, ThreatMetrix. “With a rise in online transactions and activities across devices, more needs to be done to educate online merchants, banks, social outlets and other businesses on how to decrease fraudulent activity.”

The survey respondents who expressed concern over online fraud said they felt online merchants, banks and social networks need to take additional steps to prevent fraudsters from stealing consumer information.

Nearly three in four respondents would allow a trusted online business to place an invisible cookie on their computer to automatically authenticate them, and 82% indicated that they would expect an online business to offer alternative authentication methods if they were unable to match the consumer’s digital fingerprint to their security system.

“Our survey results help validate the need and consumer preference for technology, such as device identification, to authenticate identity as opposed to using personally identifiable information,” said Dr. Larry Ponemon, chairman and founder of the Ponemon Institute. “Consumers expressed much more willingness to share data like ISP, computer serial number, type and make, rather than information like date of birth and telephone number.”

Based on survey findings, consumers have a positive perception about companies that use authentication and fraud detection tools to prevent online fraud. Fifty-six percent of consumers even indicated they are ‘more willing’ to shop or browse an online business if they know that company is taking specific measures toward combating fraud. However, the majority of respondents stated a preference for companies to share information about their device for authentication purposes — as opposed to sharing personal information to verify their identity.

“Some e-tailers today are promoting ‘anti-virus’ or ‘secure transaction’ messaging online, when they should also be touting ‘anti-fraud’ messages as well,” said Taussig.

The research also looked at consumer sentiment about fraud prevention across the banking, social media and Web 2.0 industries and mobile channel. For more information about the findings, download a copy of the report at http://info.threatmetrix.com/ConsumerSurveyOnlineFraud2011.html.

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