Fraudsters get more sophisticated and merchants must invest to keep up.(Merchant Risk Council )

The Merchant Risk Council (MRC) released results of its fifth annual survey of merchants. Two significant trends emerged from this study. Online fraud rates for merchants surveyed are now similar to the fraud rates of brick-and-mortar stores, and fraud spikes and fraudsters' use of increasingly sophisticated schemes keep retailers on alert.

Card-present fraudulent chargeback rates are usually less than 0.1 percent of sales. 48 percent of the online retailers surveyed said that their chargebacks match that rate, a significant improvement over previous years when online fraud outpaced cardpresent fraud by as much as five times.

"The numbers show a very positive trend, but fraud still requires vigilance from online retailers," said Julie Fergerson, co-chairman of the Merchant Risk Council. "As fraud prevention tools gain widespread use, their effectiveness declines, and fraudsters are always looking for ways to "beat the system."

Since 2001, online merchants report that the effectiveness of address verification systems, for example, has dropped from 70 percent to 25 percent, although its use rose from 70 percent to 83 percent over the same period. Similarly, the adoption of card verification codes increased from 38 percent to 73 percent, but merchants report ...