• by Jack Loechner , Staff Writer @mp_research, January 29, 2006

In a recently released fraud survey by CyberSource to determine where online orders were most likely made with stolen credit cards or other fraudulent payment, New York City topped the list with 18% of the respondents. Other locations requiring extra care in doing ecommerce business were reported as:

• Miami: 7%
• Los Angeles: 7%
• Chicago: 2%
• Detroit: 2%
• Nigeria: 31%
• China: 7%
• Indonesia: 5%
• Afghanistan, Mexico, Russia, U.K, Vietnam: 4% (each

Doug Schwegman, CyberSource director of market intelligence, said "... among U.S. and Canadian cities, New York still holds the dubious distinction of being number one for eCommerce fraud. But it's worth noting that survey respondents were spreading the blame far more evenly in the most recent findings."

Schwegman continued, "In 2004, 26% cited New York as the most likely venue for fraudulent eCommerce, but that dropped to 18% in 2005. Overall the top five cities gathered 36% of "riskiest" responses, down from 51% in 2004. This may reflect merchants more carefully scrutinizing higher risk orders, (or) it may simultaneously reflect fraudsters more aggressively spreading and cloaking their efforts."

During 2005, 65% of merchants reported using 3 or more detection tools. Merchants with annual eCommerce sales greater than $25 million reported an average of 7 fraud-finding tools in use. 75% of merchants overall use Address Verification Service (AVS) and 66% of merchants overall used Card Verification Number (CVN), with 10% more saying they plan to add it in the future.

The next 4 most used tools listed were, in order of mention:

• Address Point Verification (32%)
• Visa and MasterCard Secure Code (29%)
• Company specific scoring systems (28%)  
• Negative lists (27%)

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