Mobile fraud losses ‘staggering’: Report

As the number of people buying products with smartphones, tablets, and laptops increases, so is the amount of mobile fraud.

That’s the not surprising conclusion of a new study financed by two security vendors and released today, which found the   average revenue loss due to mobile fraud among 250 organizations was U.S. $92.3 million a year.

Only eight per cent of the companies said they had no losses in the last 12 months. Thirty-four per cent said they had lost as much as five per cent of their revenues to fraud, 14 per cent of respondents said they had lost as much as 10 per cent of their revenues and 15 per cent said they had lost as much as 25 per cent of their revenue.

“This is a staggering level of fraud-induced losses,” say the authors of the report, J. Gold Associates, who performed the survey on behalf of RSA and TeleSign, which makes account security and fraud prevention solutions for enterprises.

It may explain why a number of organizations are reluctant to have a bigger e-commerce presence, the report adds.

While most respondents said they have experienced significant losses from fraud, the report adds, the majority also claim they have sufficient systems and processes in place to minimize fraud. “This seems to be a clear disconnect between reality and perception.”

Also, while most believe the incidents of fraud are increasing, they believe they have significant budgets and systems to deal with the problem — this, the report says, despite the fact that 23 per cent of respondents said their site doesn’t require buyers to login with a username and password before buying goods.

The level of fraud and the average losses per organization indicate that few organizations have invested enough to keep their losses to an acceptable level, the report concludes.

Interestingly, just under half of the respondents said they experienced 24 or fewer fraud incidents in the previous 12 months. Twenty-five per cent said they had experienced between 25 and 250 incidents.

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Jim Love, Chief Content Officer, IT World Canada

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Howard Solomon
Howard Solomon
Currently a freelance writer. Former editor of and Computing Canada. An IT journalist since 1997, Howard has written for several of ITWC's sister publications, including Before arriving at ITWC he served as a staff reporter at the Calgary Herald and the Brampton (Ont.) Daily Times.

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