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E-commerce fraud falls as security improves

13 March 2012 - 10:55 by Paul Tissington

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British consumers enjoyed a year with less online card fraud than in previous periods, according to figures published by Financial Fraud Action UK last week.

2011 saw a three per cent dip in the number of fraudulent transactions being carried out online, with the cost to the consumer dropping to £220.9 million.

Back in 2008, it was even tougher to carry out safe shopping online, with a spike in fraud leading to £328.4 million being stolen away from consumers.

These figures take into account only one specific type of card fraud, known as 'card-not-present' transactions. In total the cost of fraud to the UK's economy was around £341 million last year, which is down by an even bigger margin of seven percent on 2010.

The rise of e-commerce at the turn of the millennium meant that more and more people were having their personal information used against them to extract cash from their accounts. However, the downward trend over the last three years has seen real terms reductions of fraudulent activity by up to 45 per cent.

Interestingly, it seems as if safe shopping online is finally winning out and becoming one of the best ways for people to securely carry out transactions without having to worry about the risks of fraud.

This is because instances of both telephone banking and cheque fraud were on the rise in 2011, increasing by more than a third apiece and accounting for over £50 million over 12 months.

E-commerce sites and online banking services have worked very hard to make it tough for cybercriminals to exploit customer information. In addition, many consumers are becoming far savvier about the way in which fraudsters operate and so they can spot malicious sites before they are duped into entering card details.