A fraud study of more than 6,100 consumers across 20 countries has suggested that one in four consumers has been a victim of card fraud in the last five years.
The study, by the software payments company ACI Worldwide and Aite Group, also found that 23 percent of consumers changed financial institutions due to dissatisfaction after experiencing fraud.
Card fraud is comprised of unauthorised activity on three types of payment cards—debit, credit and prepaid. Cardholders experience fraud at different rates around the globe, and each type of card has its challenges, according to the firms. The UAE has the highest rate of fraud overall at 44 percent, followed by China at 42 percent and India and the United States at 41 percent each.
Findings
· 63 percent of global consumers (respondents) who have experienced fraud are more likely to use their cards less;
· 50 percent exhibit at least one risky behaviour, which puts them at higher risk of financial fraud
· 55 percent are “very concerned” about reclaiming financial identity if they fall victim to identity theft
· More than one in ten have experienced fraud multiple times during the past five years.
Shirley Inscoe, senior analyst, Aite Group, said: “Given this latest data, financial institutions have their work cut out for them, both in terms of educational and preventative measures . Consumers lack confidence in their bank’s ability to protect them from fraud, so banks must remain vigilant in their fraud migration efforts or face increased customer attrition.”
Confidence wavering i
As organised fraud rings develop new methods of stealing funds and identities, consumers are increasingly losing confidence that there is anything that can be done to reverse this downward spiral.
· 23 percent changed financial institutions due to dissatisfaction after experiencing fraud;
· Nearly two in ten lack confidence that their financial institution can protect them against fraud; and
· 43 percent who received replacement cards as a result of data breach or fraudulent activity use their new card less than they used their original.
Mike Braatz, senior vice president, Payments Risk Management Solutions, ACI Worldwide, said: “Consumers are increasingly concerned about fraud, and are losing confidence on a variety of levels. They are unsure that their financial institutions can protect them against fraud; they use replacement cards less often due to a loss of confidence in the card or card issuer, after experiencing fraud; and post-fraud, they often change providers or their cards go to back of wallet. This has immediate and long-term implications on customer loyalty, revenue and fee income.”
Visit www.aciworldwide.com/2014fraudsurvey.
Survey
ACI Worldwide conducted online quantitative market research via a March 2014 survey of 6,159 consumers; about 300 consumers, divided equally between men and women, participated in each of the 20 countries. Of the total, 6,041 own one or more type of payment card (credit card, debit card, prepaid card). The study was conducted in 20 countries in these regions:
· The Americas (North and South America): Brazil, Canada, Mexico, and the United States
· EMEA (Europe, the Middle East, and Africa): France, Germany, Italy, the Netherlands, Poland, Russia, South Africa, Sweden, the United Arab Emirates, and the United Kingdom; and
· Asia-Pacific: Australia, China, India, Indonesia, New Zealand, and Singapore.
