Wondering what other businesses out there are doing about security? The Worldwide E-Commerce Fraud Prevention Network reports nearly half its members feel online fraud is a significant problem, but 70 percent agreed that fraud prevention tools can keep it to a minimum.

In a voluntary online poll, members were asked how online fraud affects their businesses. Nearly 10 percent of the respondents identified online fraud as "the most significant problem" they face. Only 1 percent said they never worry about it. Of the respondents, 36 percent viewed online fraud as "somewhat significant."

The survey listed 11 fraud prevention tools, and asked merchants whether they used them and which they rated as most effective at reducing online fraud. The four most popular tools were address verification systems (70 percent say they use them), customer follow-up and real-time authorization tools (both 54 percent), and post-process fraud management tools (43 percent). Interestingly, 54 percent of respondents listed customer follow-up as a tool they use to combat fraud, but only 38 percent viewed it as most effective.

Asked to rate the tools by how well they reduce online fraud, survey respondents listed the following: address verification systems (68 percent say they work well); real-time authorizations (52 percent); card verification codes (49 percent); and customizing rules (42 percent). Rated as most effective by at least one-third of respondents were fraud scoring, negative file lists, customer follow-up, and post process fraud management. The least utilized tool was a custom-built neural network, with only 12 percent of merchants indicating they use this fraud prevention method.

Merchants taking the survey represent large, midsized, and small online sites. Forty-five percent listed annual revenues of more than US$1 million; 35 percent listed revenues at less than US$100,000; and 20 percent reported revenues of between US$100,000 and US$1 million.

Other results of the survey include:

• Fifty percent of respondents reported that losses from online fraud cost their businesses between US$1,000 and US$10,000. Nineteen percent reported costs at more than US$100,000.

• Sixty percent of merchants reported they spend less than 1 percent of total revenues on fraud prevention. Nineteen percent listed about 1 percent of revenues, and 10 percent reported they spend more than 3 percent of revenues on fraud prevention.

• Thirty-three percent of respondents listed the difficulty in prosecuting Web-based fraud as the greatest threat to their online business. Other threats included stolen credit cards (22 percent), lack of security standards across the Web (19 percent), growing use of credit card generators (14 percent), and identity theft (12 percent).