Demographic data provides the ability to profile visitors and prescreen for targeted offers. It enables net sellers to set up online accounts and provide online credit approval. This gives online merchants the ability to provide customers with a 'fraud resistant' virtual credit card. 70 per cent of companies interviewed thought that the internet was inherently more risky than other routes to market, with the majority of respondents experiencing an increase in fraud on the Internet over the last year. 52 per cent of online traders claimed that Internet fraud was a problem for their organisation and 55 per cent said it was a growing problem.
Retailers become aware far too late when they have been victims of fraud.
40 per cent of companies said that they had been hit by the same fraudster more than once, with 18 per cent saying that they had been hit three times by the same fraudster before the fraud was detected and the account closed. 11 per cent of respondents admitted that their site had been hacked into. Only 15 per cent of companies said they had automated systems for detecting fraud. The vast majority still employ expensive and inaccurate manual processes. Only 52 per cent use any external data to verify a customer's name and address.