The explosive growth of the Internet as a medium for commerce over the last decade has opened up a new research area, and it has become imperative to study how customers perceive the Internet as a channel to buy and make payment online. It may be said that e-commerce is currently in a young state with many potential issues of concern. On such area is online fraud, which has expanded as rapidly as the Internet itself, and may be considered as one of the key obstacles to both customers and e-businesses succeeding on the Internet. This thesis aims to study and identify a key pattern in the change in behaviour of online customers in the context of fraud. This research was conducted on sample of full-time postgraduate students of Dublin Business School in Ireland. The research topic that the dissertation focuses on affects consumers of all ages throughout the world. In order for this research to gain greater accuracy, and for the results to be used to draw general conclusions and business decisions, a study of a much greater scale covering multiples sampling frames across various segments of the Internet users should be undertaken. Moreover, the subject of this study is very dynamic and ecommerce is evolving very rapidly. Therefore, the change in the consumer behaviour online and observations made in this research may not be relevant in the near future due to new policies in e-governance, new websites, safer payment methods etc. Such changes may greatly influence the recommendations of this research. This dissertation also draws from the instances of online fraud that the researcher observed while working for PayPal Inc. (an eBay company). Thus the focus of this study is on the online fraud encountered by customers on both, eBay and PayPal. Therefore, the examples of fraud used within this dissertation are mainly limited to the above websites. This may be considered as a limitation of this study as online fraud is much more diverse, and affects a wider range of online services.