The fear of fraud is one of the most powerful inhibitors of online spending, and recent security scandals targeting eBay have once again made trust the issue. Much is being done to combat online fraud, but more could be done to advise customers on safe online shopping and put their fears into perspective. Datamonitor believes it’s time for an independent Internet watchdog to take on such a role.
eBay has been hit by a succession of fraud scams.
Online auction site eBay has been hit in recent weeks by a succession of fraud scams. In the first two weeks of December alone two separate incidents were reported in which eBay shadow sites were set up to con the online player’s customers.
The first incident saw a Florida-registered site, operating under the name www.ebayupdates.com, email eBay’s 55 million customers to request they resubmit their financial details. The second saw another shadow site registered in Lithuania ask users to resubmit registration details, along with their credit card, bank account, drivers’ license and social security details.
eBay is by no means the only Internet site to be blighted by security scams. Nevertheless, the high profile nature of these stories again raises the specter of online fraud. Fears over security are one of the main inhibitors of eCommerce. Indeed, in November the Department of Trade and Industry revealed that while confidence in online shopping has grown massively, consumer concerns over online security are still preventing eCommerce from reaching its full potential.
While it is possible to greatly reduce fraud, it is unlikely that it will ever be entirely eradicated. Much work has already been done to combat online fraud, but more still could be done to put consumer fears into perspective. Customer education is the key to success and commendably the majority of online merchants, including eBay, explain the security measures used on their sites and provide tips for safe online shopping.
Nevertheless, if consumers’ concerns are to be allayed once and for all, an independent Internet watchdog would be best to advise and reassure them, as well as to report on fraudulent incidents. The global nature of the Internet means that the creation of such a body would be no easy task, but the important role that it could play means that the case for its creation is compelling.
Related Research: Datamonitor, security in Financial Services (BFTC0537)
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