SECURITY
Auctions are most prone to on-line fraud
15-01-2001
by Aoidin Scully
Eighty-seven percent of on-line fraud committed in 2000 was related directly to auction sites, according to a new report by Internet statistician eMarketer.
The ePrivacy and Security Report reveals that the greatest percentage of users falling victim to on-line fraud are Generation X members and Baby Boomers, accounting for 50 percent of all cases, and not the young or aged.
"For most Internet users, the protection of personal information is a real and valid concern. Offerings of free services and promises of wealth lure participants into binding contracts, or unbelievably great deals, enticing consumers to buy products that never arrive or don't meet the quality promised," said Rob Janes, an analyst at eMarketer.
As evidence of the sheer volume of auction activity being conducted on-line, eBay was recently placed fourteenth (outpacing on-line portals LookSmart and AskJeeves) in Media Matrix's global audience measurement analysis.
"Given that 16 million unique users may visit eBay in a given month, it's no surprise that auctions consistently rank as the most fraud-prone on-line activity," said Janes.
In Ireland, Ebid.ie has denied that it was forced to cut short its targets because of lack of investor interest. It was reported in November that the company had sought more than IEP1 million in funding but had only succeeded in securing IEP700,000.
However, in an interview with the Sunday Business Post, the company's Chief Executive Officer, Claire Cronin, said the company had changed its plans while pursuing the additional investment.
"What happened was we had intended to develop a major business-to-business function into the site. This would have required a very big upgrade in technology and investment, at least IEP500,000 plus a separate marketing budget plus another team of about five people to dedicate themselves to the B2B market. We still believe that B2B makes sense but when the market turned back, we decided it was going to delay profitability on the site in the short term," Cronin told the paper.
She said that the IEP700,000 in new investment, which was handled by Investment Bank of Ireland, was divided between existing investors and new investors.
Cronin maintained that the company would reach profitability "ahead of schedule" in the first half of 2002. The site hosts about 1,000 auctions per week.
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