Fear of 'Click Pocketing' costs e-retailers £23 billion

Archived article dated Friday November 16th 2007

Online shoppers' fears of being 'click pocketed' - becoming the victim of cyber fraud - is costing Britain's e-commerce sector £23 billion* a year, new research reveals.

The '3V Online Shopping Confidence Barometer'** from secure payment provider 3V, shows that members of the public would buy an extra two items a month on the internet if they were 100% confident in online security.

The research also reveals that, ahead of the busy Christmas shopping period when Britons are each expected to spend £511*** online, two fifths (37%) of web consumers - ten million people - admit to a serious fear of fraud.

Meanwhile, almost two thirds (63%) of online shoppers have called for tougher penalties for convicted cyber fraudsters. And almost half (45%) of those surveyed believe that the Government should issue clearer guidelines for secure online shopping, while two in five (39%) think retail sites can help by reassuring the public that their payment card details will remain safe.

Despite two thirds (64%) of Britons now using more and varied websites for internet shopping than a year ago, they are still nervous about putting financial details onto such sites. Established sites such as Amazon are considered much more trustworthy by seven in ten (69%).

Kieron Guilfoyle, chief executive of 3V Transaction Services, said: “The British public has strong reservations about the safety of their credit and debit card details when shopping online.

“Internet shopping has become incredibly popular over the past few years, and it's up to the Government, retailers and the payments industry to ensure that we create a secure environment for consumers to enjoy all the perks of internet shopping without a fear of becoming a victim of fraud.”

3V's 'e-Fraud Barometer' research from September this year estimates that retailers are currently losing £594.5 million to cyber fraud. The company's latest research figures show that the fear of being 'click pocketed' is also now at such a level that three in five (58%) online consumers are considering using alternative payment methods such as 3V VISA Prepaid Vouchers - saying it would give them added security when purchasing online.

3V VISA Prepaid Vouchers were introduced in the UK in November 2006, following a successful year-long pilot in the Irish Republic and with over 140,000 people registered, there hasn't been one case of fraud reported by merchants where 3V Vouchers have been used.

An added bonus for merchants already accepting VISA payment is that they don't need to perform any software integration, as 3V Vouchers are processed just like a VISA debit card payment. The Vouchers use a unique two-factor authentication system where security details are sent separately to the customer's mobile phone or email address.

The product is the UK's only open-loop prepaid shopping Voucher, and is accepted anywhere online that carries the VISA logo. The cost of buying 3V Vouchers has recently been reduced, meaning they are now better value than ever. From 12 November, £20 3V Vouchers carry no surcharge, meaning online shoppers seeking low-value items will be able to use the secure service for free. Vouchers between £30 and £100 cost just £2.00, while derivatives between £110 and £200 cost £3.50.

The new 3V Voucher balance transfer service also that means that balances on existing 3V VISA Prepaid Vouchers, which are available from over 25,000 payzone retailers in the UK, can be transferred to other 3V Vouchers that have not expired.

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