Short-term loans processed by lenders online totaled $13 billion last year, which represented a 120 percent increase over five years from 2006 to 2011, according to an industry report. The findings in "Managing Fraud Risk in Online Lending" jointly produced by research firm Mercator Advisory Group and iovation, focused on the increased risks that online lenders face as short-term loans become more prevalent. Their primary recommendation is for loan providers to adopt a "layered" approach to thwarting fraud that includes identification of mobile phones, tablets and computers that appear to have a history of committing fraudulent activities. "With so much short-term lending online, cybercriminals have become extremely creative at conning these lenders into giving them loans with no plans of ever paying them back," said David Fish, a senior analyst in Mercator's fraud advisory service. "A layered approach to fraud risk management in online short-term lending through a combination of device identification and reputation management is no longer merely desirable, it's a necessity." Companies that provide fraud prevention tools have helped online lenders save millions of dollars by ID verification through extensive background checks and detecting when hackers commit fraud at the point where abuses are most likely to occur, including new account creation and logins.