Research Study: 85% Of Consumers Believe Online Fraud Is A Growing Concern

Only 12% of Consumers Stated They Think Companies are Getting Better at Protecting Their Personal Information Online

ThreatMetrix, the fastest growing provider of cloud-based fraud prevention solutions that do not require personally identifiable information (PII), recently announced some results of a joint study with the Ponemon Institute that reveals consumers' growing concern over online fraud. The research, which surveyed consumers on their awareness and confidence in online fraud prevention, was compiled in a report, "Consumers' Reaction to Online Fraud."

Results showed that 85% of survey respondents reported being worried and dissatisfied with the level of protection online businesses are providing to stop fraudsters today, which is up 5% from a 2009 Ponemon study that asked the same question. Forty-two percent of respondents, in fact, said they have been the victim of online fraud. Of those, 80% said they did not report the crime, however, and only 19% said they reported it only to the online business directly.

"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."

What Online Businesses Can Do to Combat Fraud
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."

Information Consumers are Willing to Allow a Trusted Online Business to Check to Verify Their Identity, or Digitally Fingerprint Their Computer:

• Serial number of computer 88%
• Type and make of your computer 83%
• Internet service provider 76%
• Browser settings 71%
• Type of browser 65%
• IP address 59%
• Types of software applications residing on your device 54%
• Email address 46%
• Purchase history 39%
• Planned future purchases 35%
• Date of birth 34%
• Telephone number 17%
• Home address 16%
• Name 14%
• Zip code 9%
• Social Security number 4%
• Driver's license number 2%

Consumer Sentiment Around Promotion of Fraud Detection Technology

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.

Additional Resources

• Datasheet on the ThreatMetrix Cloud-Based Fraud Prevention Platform
• Blog on the ThreatMetrix Cloud-Based Fraud Prevention Platform
• ThreatMetrix SmartID Demo

About Ponemon Institute
The Ponemon Institute is dedicated to advancing responsible information and privacy management practices in business and government. To achieve this objective, the Institute conducts independent research, educates leaders from the private and public sectors and verifies the privacy and data protection practices of organizations in a variety of industries. For more information, visit www.ponemon.org.

About ThreatMetrix
ThreatMetrix helps companies stop web fraud and accelerate e-commerce in real-time so they can significantly reduce online fraud, acquire more customers faster, reduce costs, and increase customer satisfaction. The ThreatMetrix Cloud-Based Fraud Prevention Platform, incorporating ThreatMetrix SmartID cookieless device identification, provides online businesses with the ability to protect themselves and their customers by verifying new accounts, authorizing payments and transactions and authenticating user logins in real-time. Online businesses can deploy the ThreatMetrix Cloud-based Fraud Prevention Platform, which does not rely on personally identifiable information (PII), for traditional online activity via a personal computer as well as for mobile and tablet devices. The company serves a rapidly growing customer base around the world across a variety of industries including social networks (dating, gaming), financial services, e-commerce, affiliate marketing and payments. For more information, visit www.threatmetrix.com .

SOURCE: ThreatMetrix