Is Net fraud coverage a fraud?

From...

By Jeff Palfini

(IDG) -- An exaggerated fear of credit-card information theft among consumers is the major barrier to widespread acceptance of e-commerce, according to a new study released Wednesday by Jupiter Media Metrix.

The report, which cites Visa USA as a source, said the rate of credit card fraud resulting from online transactions is three to four times that of all credit card fraud. Consumers, on the other hand, believe that credit card fraud is 12 times more likely to occur online.

Jupiter attributes the gap to media hype and overuse of the word fraud. Security breaches where numbers are not stolen or are stolen but never used are often considered fraud even though no liability is incurred, the research firm said.

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Nevertheless, fear of all types of online fraud is the leading roadblock to e-commerce, according to Jupiter's survey of consumers. Eighty-one percent of respondents cited fraud as a deterrent. Fifty-eight percent of respondents have at one time decided not to go ahead with an online purchase because of security concerns.

The issue of online credit-card fraud has been covered extensively in the media. One of the difficulties with that coverage is that the numbers often come from two different sources. One source, credit card companies such as Visa, have a vested interest in the public being comfortable making online transactions and usually have lower numbers on online fraud. The higher numbers, as one might expect, come from security companies' research on online transaction.

The difference in the numbers leave the media, the consumer and merchants -- who shoulder the liability in the result of a fraud -- wondering whom to believe.