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Few Consumers Victimized By Online Fraud Report It

New Ponemon Institute report shows consumers prefer using machine fingerprinting over personal information to verify their identities online
Most consumers who have been victims of online fraud don't report it, a new study has found.

Forty-two percent of consumers surveyed in a report by The Ponemon Institute say they have been the victim of online fraud, yet 80 percent of them didn't report it. Just less than 20 percent reported it to the online business involved.

"A lot of fraudulent activity goes unreported today, making it difficult for online businesses to fully understand the prominence and seriousness of the problem," said Reed Taussig, president and CEO of ThreatMetrix, which sponsored the report. "With a rise in online transactions and activities across devices, more needs to be done to educate online merchants, banks, social outlets and other businesses on how to decrease fraudulent activity."

Interestingly, consumers are starting to look for antifraud actions by their online merchants: Fifty-six percent of consumers say they are more willing to browse or shop an online business if that site is working on combating fraud, and most prefer sharing device-specific information for authentication rather than personal information to prove they are who they say they are.

"Our survey results help validate the need and consumer preference for technology, such as device identification, to authenticate identity as opposed to using personally identifiable information," said Larry Ponemon, chairman and founder of the Ponemon Institute. "Consumers expressed much more willingness to share data like ISP, computer serial number, type and make, rather than information like date of birth and telephone number."

Among the information they are willing to use for online authentication verification: serial number of their computers (88 percent); computer type and make (83 percent); ISP (76 percent); browser type (65 percent); IP address (59 percent); types of software apps running (54 percent); email address (46 percent); purchase history (39 percent); planned purchases (35 percent); birth date (34 percent); telephone number (17 percent); home address (16 percent); name (14 percent); ZIP code (9 percent); Social Security number (4 percent); and driver's license number (2 percent).

Eighty-five percent say they are worried and unhappy with the protection online sites provide today, the survey found. A full copy of the report can be downloaded here.

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