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Credit Card Applications » News » Other » Consumers Remain Wary of Retail Fraud

Consumers Remain Wary of Retail Fraud

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Consumers Remain Wary of Retail Fraud
July
30

After a year in which several massive data breaches made headlines, shoppers around the globe are wary when it comes to trusting retailers with their payment information.

A survey of more than 6,000 consumers worldwide revealed that nearly half don’t think stores take adequate measures to secure their financial information, leaving them vulnerable to data breaches, identity theft and payment fraud.

Twenty-nine percent of respondents said they don’t trust merchants to keep their personal data secure, and 58% said banks, credit unions and other financial institutions are doing a better job of safeguarding sensitive customer information than retailers are.

On the lookout for fraud

Seventy-seven percent of consumers are eager to be contacted via phone call, email or text message if there is suspected fraudulent activity on their accounts. And 74% would prefer if those alerts happen before the suspicious transactions are processed.

However, the survey indicates there is room for banks to do a better job when it comes to fraud awareness. Forty-two percent of consumers polled don’t remember their financial institutions ever giving them any information about fraud and how to prevent it.

Shirley Inscoe, senior analyst at Aite Group, said “Consumers want to engage in the battle against fraud. Financial institutions must take a proactive role in not only engaging customers in fraud-alerting activities, but educating them on preventative measures to take to most effectively combat it.”

Prepaid card use correlates with fraud rates

Countries with high rates of prepaid card use had higher rates of payment fraud. China and India showed the highest prepaid card fraud rates (17% and 18% respectively), along with some of the highest usage of prepaid cards – 93% for China and 91% for India.

Australia, Canada, New Zealand and the United States all had lower rates of prepaid card use (70% or less) and also had the lowest rates of prepaid card fraud, at 4% or less. Prepaid card use is steadily rising in these countries, however, and analysts project that fraud rates may rise along with them.

“Global Consumers: Concerned and Willing to Engage in the Battle Against Fraud” was sponsored by ACI Worldwide and Aite Group. ACI is a payment processing company that handles electronic payments and banking for over 5,000 companies worldwide. Aite Group is an independent research firm. The study was conducted online in March 2014 and includes responses from 6,159 consumers from 20 countries including the United States, Canada, Mexico, France, Germany, Russia, the United Kingdom, Australia, China and India.

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