Risk Identification Paper
...with each other. In terms of e-commerce, risk is viewed as the possibility of loss of confidential data or the destruction, generation, or use of data or programs that physically, mentally, or financially harm another party as well as the possibility of harm to hardware (Greenstein & Vasarhelyi, 2002, p.214).
This paper will explore the risk of e-business fraud, such as credit card fraud, identity theft, theft of intellectual property and brand fraud as well as ways to mitigate fraud risks.
Credit Card Fraud
According to the Federal Trade Commission, credit card fraud was the most common form of identity theft reported in 2005, followed by phone or utilities fraud, bank fraud, and employment fraud (Lindenmayer, 2006). Most consumers use credit cards to make purchases on the Internet because it gives them a sense of security unlike other forms payment. If the consumer¡¦s credit card is used fraudulently, the consumer usually is not responsible for the charges if he or she followed the company¡¦s reporting procedures.
While the above process protects consumers, e-retailers must deal with additional issues like chargebacks. A credit card company will refuse to pay if a transaction is found to be fraudulent. An online retailer has to absorb these chargeback costs; tradition brick and mortar companies do not. The traditional company usually has a signed transactional receipt. This documentation is all that is needed to prove the credit card issuer authorized the request and as such, they will absorb the loss due to fraud.
Identity Theft
Identity theft usually goes hand-in-hand with credit card fraud. According to Lindenmayer (2006), ¡§the average amount of fraudulent charges per victim rose 8.5% from 2004, to $6,383. That comes at a hefty price to businesses, as they absorbed 93% of the financial damage, or roughly $6,000 a victim last year¡¨.
Identity theft...
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