Issues of liability in instances of online fraud are holding back the advancement of e-commerce in Australia, according to retail industry and security experts.\nSpeaking at a cyber security roundtable in Sydney, Mikko Hypponen, chief research officer at F-Secure, said the prevailing notion that consumers should not be held liable for instances of online fraud was causing a cycle of blame which commonly ended with merchants.\n\u201cWhen you think about liability. . . banks look to credit card companies, credit card companies look to merchants and merchants look to consumers, but the biggest fall seems to be taken by the merchants,\u201d he said.\nHowever, more often than not, it was merchants rather than the consumer, bank or credit-card provider that had to absorb the cost of fraud, Hypponen said.\n\u201cWhen a consumer\u2019s credit card number is stolen and is used to buy iPods to later sell on eBay, the store who supplied the iPods takes the fall,\u201d he said. \u201cThere is no incentive for the bank or credit card company to solve the problem.\u201d\nMichael Lonie, policy manager at the Australian Retailers Association, said the association had been fighting for a number of years to lift the burden of fraud off merchants.\n\u201cYou can do everything that is in the guidelines the [credit] card issuer requires you to do, but at the at the end of the day, the absolute liability comes back to you as a merchant,\u201d he said.\n\u201c[Liability for online fraud] is perhaps the reason why many bricks and mortar retailers operate a Web site as an information source, but not as a business to consumer [sales] function within that. It is an aspect that is holding back [online] commerce for a large section of merchants.\u201d\nLonie said the problem was aggravated for small and mid-sized merchants which did not have the negotiating clout of the major retailers such as Harvey Norman.\n\u201cIt depends on the power of the merchant -- the banks wouldn\u2019t dare take on Gerry Harvey as he can be a very powerful public figure if he is annoyed,\u201d he said. \u201cThe same would go for Woolworths and perhaps Coles. If you are the Susan or Just Group in the second tier, then you are treated differently.\u201d\nNick Abrahams, national leader of Deacons\u2019 technology, media and telecommunications group, said there was significant public indifference about the cost of fraud due to the fact that consumers typically didn\u2019t suffer any liability.\n\u201cAs there is no sting for the consumer, there is no political debate about it,\u201d he said.