Online fraud is on the rise, and e-tailers who fail to maximize their security processes are leaving themselves open to serious information breaches – that’s the warning from the U.S. government.
Cyber-crime is now top of the political agenda, with President Obama noting in a recent speech that preventing online fraud is a matter of national economic priority.
In fact, legislation is due to be passed this year to protect online businesses, by enabling the private sector to share more information regarding cyber threats with government officials.
Another law hoping to be passed by the government is the criminalisation of U.S. financial information and botnet sales, to contain the global threat of online fraud to American retailers.
These regulations could potentially come into force just months after the USA suffered a series of major information breaches. Sony, the U.S. military Central Command and Apple’s iCloud have all fallen victim in a very public manner, while retailers including The Home Depot, Target and Staples have suffered payment hacking scandals costing millions of dollars.
It’s not just the USA where online security has become a major issue, either. The British Retail Consortium recently revealed that retail crime is at a 10 year high, with cybercrime being the number one threat to UK businesses. The total number of reported attacks surpassed the 135,000 barrier – a 12% increase on 2013.
The 10 biggest scams in Britain alone last year cost retailers £670 million, while cybercime is thought to be costing the global economy more than $100 billion each year.
Online fraud is a relatively low risk, high result opportunity for criminal organisations, which has resulted in levels soaring over the past few years.
While e-tailers may have put security measures in place when establishing their site, new techniques for infiltrating networks are constantly emerging, making it vital for brands to continually reassess and upgrade their security solutions.
Safeguarding personal information from online data theft is also rising up the consumer agenda, with an increasing number of shoppers displaying interest in how companies protect their data.
The reputational impact of online fraud can be just as costly as financial repercussions; shoppers are more likely than ever to make purchases from an e-tailer they believe to be safe.
According to statistics released by Creditcards.com, 45% of U.S. credit and debit cardholders claim they are less likely to shop with a retailer whose security systems have been hacked during the last year.