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Fraud losses fall

2011-01-26 internetretailer

Fraud rates for online merchants in the United States and Canada remained steady at 0.9% in 2010 for the second straight year, says a report released today by CyberSource, a subsidiary of payment card network Visa. The fraud rate for online merchants in the United Kingdom, however, increased to 1.9% last year, up from 1.6% in 2009.
Losses from online retail fraud in North America amounted to an estimated $2.7 billion in 2010, CyberSource says, down from $3.3 billion in 2009, another bit of good news for online retailers, who generally have enjoyed higher online sales during the holiday season.

Online merchants are becoming more aggressive about rejecting suspicious orders. North American Internet retailers rejected 2.7% of orders in 2010, up from 2.4% in 2009, the first increase in two years but still belowown, I think you will see fewer orders rejected,” Schwegman says.

The payment processing and fraud prevention organization blamed the higher rate in the United Kingdom on such factors as criminals moving more of their activities to the country after facing stiff prevention methods elsewhere, and the tendency of U.K. web merchants to accept more cross-border e-commerce transactions, which are more likely to be fraudulent.