Online Credit Card Fraud a Beat Up: Gartner

Joe Sweeney, a research director for Gartner, believes the 40 per cent of online transactions that credit card companies cite as fraudulent is inaccurate.

He believes companies are hurting themselves by not being online, and if the incidence of credit card fraud is holding them back, then they shouldn't be concerned.

"I deal with a lot of adult sites as well as general sites and they don't see rejection of cards at any level near this [40 per cent]. I think online credit card fraud is much lower, under 5 per cent from the feedback I have received."

"Businesses in Australia shouldn't be overly concerned; they would lose more if they weren't online. Fraud on the Internet is more transparent than fraud on the shop floor, which is only known after a stocktake."

Sweeney is critical of credit card companies' willingness to help businesses in this new online era, as they seem unable (or unwilling) to offer cards with better security. He said he has made several unsuccessful attempts to get dollar figures from credit card companies to ascertain the real value of online fraud in Australia.

"The problem is that it is in the credit card companies' interest to say that fraud is high, thereby enabling them to keep the fee high."

However, according to Sweeney online credit card crime is on the rise through 'get rich quick' schemes and 'pyramid selling' activity, which he says is reaping fraudsters millions of dollars. He also noted that the incidence of 'hackerism', where politically motivated hackers aim to embarrass major companies, was growing at 70 per cent a year.

While the threats may be overstated, the take-up of fraud insurance or e-commerce insurance is set to rise in Australia, Sweeney added.

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