Internet credit card fraud looks set to explode this year in line with the continuing growth in the number of people now choosing to shop online, according to the internet's UK commercial watchdog.
The Interactive Advertising Bureau thinks total credit card fraud is set to top £400m in 2001, an increase of more than 36 percent on last year. Internet card fraud is expected to account for around two percent of this.
"Online credit card fraud is a drop in the ocean compared to total credit card fraud but it is increasing," said IAB chairman Danny Meadows-Klue. "If online traders take this issue seriously more people will shop online."
Research conducted in early August by the National Consumer Council also found that consumer confidence has been significantly damaged by incidents such as the accidental posting of customer credit card details on the Consumers' Association website. Such setbacks are seriously hampering e-business in the UK.
"The overwhelming impression we received is that consumers sensed there is a lack of respect for their rights and safety online," said the report.
Despite the small proportion of online fraud compared to overall credit card fraud, customers need reassurance their details will be safe before they are content to shop online.
The government, with the support of banks and retailers, took steps towards a safer environment with the launch of its internet safety scheme in July. The plan is to get rid of signature authorisation in favour of pin numbers by 2004.
"As e-commerce grows banks are working alongside retailers and the international card schemes to add further security features and develop new banking services to help this form of trade," said Melanie Hubbard, manager for credit card security firm Cardwatch.
The Association of Payment Clearing Services supports the scheme and backs chip-based cards as the way forward in tackling online fraud.
The IAB’s security guidelines for online shoppers can be found here.