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Businesses in the UK are not doing enough to prevent online fraud and theft, according to reports.

The website ITweek.co.uk reports that a study by 3V and the Interactive Media in Retail Group found that more than a third of online retailers reported an increase internet fraud since chip and pin technology was launched.

Despite the majority (64 per cent) of e-tailers saying that they plan to introduce measures to combat online fraud, few are considering the 3-D secure initiative - the system used by things like MasterCard's SecureCode.

"The increase in online fraud is directly attributable to chip and pin success on the high street," Kieron Guilfoyle, chief executive at 3V, explained to ITweek.

"Two-factor authentication is critical in reducing fraud; it's difficult enough getting customers to make a purchase in the first place without breaking their journey by making [them sign up to 3-D Secure]."

Elsewhere in the report, it is estimated that online fraud costs UK businesses £580 million a year, but that this figure could rise to £1.5 billion by 2010.