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Online retailers want the government to introduce stiffer penalties for convicted online fraudsters, according to a new study.

Two thirds of retailers questioned in the survey, carried out by prepaid voucher provider 3V and the IMRG, said that harsher punishments would be the single most effective way to combat internet fraud.

With the problem believed to be costing UK etailers around £594.5m a year in lost revenue, 30% of respondents also called for government funding to help develop more robust anti-fraud measures.

The report said difficulties in gathering evidence and the broad scope of the 2006 Fraud Act are made it harder to secure tough penalties for cyber criminals.

Despite the concerns, 44% of respondents thought cyber fraud would only have a marginal impact on the sector's future.

But a third said it would continue to result in some customers limiting their spending to more established sites - highlighting a need for ‘fraud free’ payment methods to encourage internet users to shop on smaller sites.

Two thirds of retailers said they had witnessed some increase in levels of online fraud over the past year and all had bolstered their security in some way.

Forty eight percent had already adopted the Verified by Visa and Mastercard Securecode authentication systems or were planning to do by the end of the year.

Andrew McClelland, director of projects and marketing at the IMRG, said:

“Retailers are doing their utmost to tackle e-fraud and have been quick to adopt any anti-fraud measures they can put in place without damaging the customer journey.

"But they need more support from government in the shape of tighter and tougher penalties and backing for anti fraud innovations which do not detract from a seamless sales process.”


Published 15 October, 2007 by Richard Maven

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