Global card fraud continues to rise - survey

A quarter of people have been hit by card fraud during the past five years, prompting many to ditch their provider, says an ACI Worldwide-commissioned survey covering 17 countries around the world.

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Global card fraud continues to rise - survey

Editorial

This content has been selected, created and edited by the Finextra editorial team based upon its relevance and interest to our community.

According to the Aite Group poll of 5223 people - around 300 for each country - Mexicans are the most likely to fall victim to fraudsters, with 44% hit in the last five years.

Chip and PIN-less America comes second, on 42%, followed by India on 37%. The UK ranks sixth on 34%, well above its European neighbours, Germany (13%) and the Netherlands and Sweden (both 12%).

The survey also shows the cost to banks when their customers fall victims, with attrition rates after experiencing fraud averaging 21%. Of those that get a replacement card, 46% use it less than the original and half of fraud victims also start using more cash.

Identity theft replaces credit card fraud as the greatest concern from fraud exposure in this year's survey with 49% of respondents saying that they are very concerned about possible harm to their financial standing and rating.

Yet many consumers continue to exhibit risky behaviours, including keeping written records of PINs, throwing un-shredded documents containing sensitive information into bins and using public computers or PCs without security software to do Internet banking and to shop online.

Consumers are keen to hear from their banks if they are at risk, with 82% 'very interested' in being notified before action is taken if unusual activity on their account or card has been spotted.

Respondents want immediate and direct methods of contact from their banks, preferring to be alerted by mobile phone followed by an e-mail or text message. This marks a change from 2011 where contact via home phone was a secondary preferred method.

Shirley Inscoe, senior fraud analyst, Aite, says: "Financial institutions, issuers and retailers need to enlist customers in the fight against fraud, educate them on prevention best practices, and reassure them of policies should fraud occur. Maintaining customer satisfaction, loyalty and preserving wallet share can be achieved by communicating with and enlisting the customer in the fight against fraud. "

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Comments: (4)

A Finextra member 

Many companies miss an important point: the winner has to outrun other contenders, not the bear. Fraud goes after the weakest link.

A Finextra member 

300 people in 17 countries does not a global fraud survey make.  I will defer to the experts in card fraud - the card networks, who see every disputed, charged back item processed, which contains a distinct and quantifiable reason code.

A Finextra member 

It is interesting to see the "educating and enlisting customers in the Fraud fight" comment as the key solution.Of course  it is. The bigger challenge is how you do that?

I have just been reading a soon to be published Security report from Mapa Research which looks at different approaches to online security by banks around the world.From reading it, it is evident that what is missing is not so much the education piece but enlisting.

The report concludes that getting customers to participate in fighting fraud is about allowing them ( within reason) to personalise the security measures in place to suit both their risk profiles and lifestyles. By allowing them to do this they will engage more positively in the fraud prevention process and become more responsive to security issues generally.

Unfortunately many Financial Services firms find the personalisation challenge a challenge too far, and security is no exception. .

Ketharaman Swaminathan

Ketharaman Swaminathan Founder and CEO at GTM360 Marketing Solutions

"...half of (card) fraud victims ... start using more cash". It's quite likely that 2FA and other sources of friction in ePayments will make people ditch ePayments and return to cash / checks. Goes to show that the shift between paper and electronic payments is not as unidirectional as the digerati would have us believe.

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