One such firm is Cotton Traders who lost details of their customers’ credit cards to scammers but could this event spell the end of consumer confidence in credit cards? The company announced that its customer’s credit card details were compromised, and it can only be a matter of time before we start to see reports showing consumer confidence in credit card payments dipping.

Another retailer  TK Maxx have also recently had their customer databases hacked, so fraudsters can simply obtain card details and use them for personal gain.

At the moment the London is reportedly the UK's capital for online credit card fraud, according to a report published last year which maps the UK's card fraud hotspots; which raises the question, how long before proper action is taken against what is clearly a real threat to consumers.

Cotton Traders had their customer’s credit card details stolen from their website although the company maintained that the details were encrypted and that any cards that were compromised were cancelled and reissued.

Cshop– Cotton Traders ecommerce package supplier, have added a news flash on the Cshop website reassuring users that Cshop users were OK. Cshop report read: “Regarding recent news reports we would like to reassure clients old and new that recent news reports identifying the breach of a web site in January 2008 was an isolated and contained incident involving bespoke code outside of the current Cshop solution.

“This incident was identified and closed quickly and effectively, and we have assisted our client in managing their solution.

This incident in no way effects other clients’ current web applications, which are very different and adhere strictly to current leading industrial security standards. Cshop has been, and is currently validated by security experts, and we are working towards PCI compliancy in 2008.”

Studies show that many credit card companies and banks opt for the Address Verification System (AVS) which is a system to verify the identity of a person claiming to own a credit card.

According to latest research, internet and mail order retailers often rely on AVS matches to help them determine that the order has been placed by the card holder. But by using compromised cards and address details fraudsters can virtually guarantee that, although the transaction appears genuine, the retailer actually has no realistic way of verifying the correct address details.

The Security Code check is also useful, but again has been compromised in these recent frauds. Goodwill added: “Another method of security is for the merchant to sign up for Verified by Visa or MasterCard SecureCode.

However, this does not mean that credit cards are any safer under AVS system; already more and more retailers are seeking alternative secure methods of payments. Experts also argue that the alternative payment methods are beginning to sound less and less “alternative” and more and more mainstream.

Dabs.com’s Marketing Director Jonathan Wall, he says “we now have a significant percentage of our revenue coming through alternative payment methods like Paypal and Checkout, and we are now looking at what other methods we can offer in the future.”

Experts say that if the quotes from Latitude in this week’s NMA report on alternative payments are to be believed, it would mean that Google Checkout is still a marginal payment scheme.