A recent fraud study conducted by Javelin Strategy & Research and LexisNexis confirmed what we already knew: identity fraud is on the rise, and so are the losses that online merchants face. What we learned from the report, however, is that the impact on retailers is much worse than originally thought.

Based on the study results released by LexisNexis, U.S. retailers incurred losses of $191 billion in 2008 due to identity theft, stolen merchandise and fees associated with chargebacks. Even more alarming is the fact that, between the three primary groups surveyed—merchants, financial institutions and consumers—the cost of fraud to retailers is almost 10 times greater than the losses absorbed by financial institutions and 20 times greater than the losses suffered by individual consumers. (more…)

Good news for online retailers came this weekend as reports showed that this year’s online sales during Black Friday were up 11% from last year, with U.S. shoppers ringing up $595 million worth of orders throughout the day. The bulk of the increases, not surprisingly, went to the largest stores. As the blog on the Wall Street Journal reports:

The retail sites for Amazon.com, Apple, Best Buy, Target and Wal-Mart each saw more than 4 million unique visits Friday, comScore said, with Amazon receiving the most traffic (up 28% from 2008). Apple, Best Buy and Wal-Mart sites also experienced double-digit traffic gains. According to Experian Hitwise, another Web monitoring firm, other e-commerce standouts included Sears, Staples and Dell.

These results are welcome news for retailers who have been concerned that fear of identity theft could have a noticeably negative impact on sales. Just last week SC Magazine predicted overall online spending to be down this year because of such fears. Luckily, so far, this does not appear to be the case. (more…)

Holiday shopping season is upon us; combine that with the current unemployment rate, and online fraud is likely to reach an all-time high this year. This correlation may not immediately make sense, since many people think Internet crime is only perpetrated by organized fraud rings and overseas master criminals, using botnets and committing identity theft.

But while that kind of fraud certainly does exist, there is another type of fraud that can be equally troublesome and, to some extent, even harder to combat: fraud committed by individuals using their own legitimate information. A very common example of this kind of crime is shipping fraud and it takes several different forms. Here are a few examples and tips on how companies can address this problem. (more…)

In the UK, identity fraud has been identified as one of the fastest growing crimes in 2009. In response to this alarming news, the UK government is kicking off a National Identity Fraud Prevention Week to try to raise awareness about the issue and focus on what individuals and businesses can do to protect themselves.

With a website devoted to the new campaign, it’s easy to take a quick look at some statistics about fraud in the UK, and some of them are quite frightening. While the information on the site is based on UK numbers, the concerns that those statistics raise are likely applicable in many countries, as identify theft is a world-wide problem. (more…)

The Merchant Risk Council (MRC) represents the largest and most influential constituency focused exclusively on making eCommerce more safe and secure. iovation is a proud sponsor of the Merchant Risk Council and brings you this interview and podcast with Executive Director, Tom Donlea.

Listen to the Podcast >

iovation: This is Scott Olson on behalf of iovation. I am here with Tom Donlea, the Executive Director of the Merchant Risk Council. Hi Tom.

Tom Donlea: Hi Scott.

iovation: Tom, as the Executive Director of the Merchant Risk Council, you lead this trade association made up of merchants, vendors, e-commerce management professionals, and law enforcement. I imagine this role gives you a great deal of insight into the key issues facing online merchants. After having just completed the Merchant Risk Council semi-annual platinum meeting and now preparing for the upcoming conference in March, is there one topic you would say is getting more attention than others?

Tom Donlea: Yes, Scott. I think for the MRC it has clearly been the economy. A lot of our merchants are increasingly focused on managing their costs and minimizing losses. They are getting a lot of pressure, so they are coming to the MRC with some very specific requests; three in fact. The first thing is they are looking for benchmarking data. They want to look at their costs, the resources they are using, and investments that they should put toward managing fraud risk. (more…)