Millions lost in online sales because shoppers don’t trust web security

Many online shoppers do not trust web security
Many online shoppers do not trust web security
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POOR online security costs the economy more than £200 million a year by frustrating internet shoppers or leaving them fearful of fraud.

New research has estimated that £1.02 billion worth of transactions were abandoned last year, either temporarily or permanently, because consumers got tired of working their way through lengthy and complex verification processes.

The study suggests that one in five of those cancelled purchases were dropped completely, costing retailers £214m.

Almost half of UK shoppers – a total of 44 per cent – have abandoned at least one online transaction in the past year, because of security issues, the study by financial services firm Experian found.

The Scottish Business Crime Centre (SBCC) has urged businesses to seek expert advice to ensure they are not losing out.

Gary Ritchie, assistant director of the SBCC, said: “E-commerce is part of our ‘on demand’ society and consumers are increasingly aware of security issues.

“Outdated, slow systems may actually make them suspicious and it’s important that businesses seek expert advice from specialists in this fast-changing space.”

Experian found poor internet security was forcing shoppers to instead contact call centres, submit physical documents through the post, or visit stores and branches in person to confirm their identity. The credit scoring agency also fears that some companies might choose to lower the level of proof in order to make sure they do not lose out on business, so increasing the risk of fraud.

Nick Mothershaw, UK director of identity and fraud at Experian, said: “The UK’s lost billions from inefficient online identity and security measures is a price that doesn’t have to be paid given that technology now enables incredibly robust identity checks to be undertaken almost instantaneously.

“Older forms of identity verification draw on limited information or out-of-date data, cannot instantly validate as many genuine customers, and don’t provide extra assurance from interactive questioning or the checking of previous identity fraud intelligence. They require organisations using them to prioritise security or customer convenience.

“Those using less efficient identity checks can benefit significantly by upgrading to newer tools, which enable improvements in security levels and faster, less onerous checks.”

Online fraud is one of the fastest growing crimes in the UK, with 80,000 reported cases across the UK in 2010.

The SBCC says studies have shown that 96 per cent of people do not believe organisations protect their information, while only 52 per cent of companies have a policy in place designed to protect identities.

However, it is not so much fear of crime that is putting off online shoppers, so much as short attention spans.

Professor Paul Barnes, director of the International Fraud Prevention Research Centre, said: “Depending on the reason for the identity verification check, our tolerance during a transaction varies greatly – and can be as short as a 60-second window.

“With millions potentially being lost from the key industries in the UK, it is vital that this issue is addressed as soon as possible.”