BOSTON—Don’t expect U.S. consumers to be actively engaged in protecting themselves from ID theft and financial fraud until they have more “skin in the game.”
That is the assessment of Aite Group research director Julie Conroy, who explained that that U.S. consumers are some of the most disengaged in the fraud fight.
To quantify consumers’ engagement with fraud prevention and security, Aite surveyed 2,802 consumers across the globe in Q3 2016. The goal was to understand the extent to which consumers are engaging in actual behaviors to help protect their identity and financial security, as opposed to theoretical behaviors that often don’t translate into action, the company stated.
A number of readily available capabilities that can help consumers actively protect their finances and identity are on the market today. Payment card alerts are one preventative capability consumers can opt to use, noted Aite. Aite found that 89% of Indian consumers have signed up to receive debit card alerts, while 61% of U.S. consumers have signed up, and only 40% of Australian consumers have signed up. This discrepancy can be better understood by looking at consumers’ concerns regarding card fraud, the company said.
“Aite Group finds that the percentage of Indian consumers who are very concerned about identity theft (60%), debit card fraud (73%), and credit card fraud (75%) is higher than consumers in all other countries surveyed. By contrast, only roughly one in three U.S., Spanish, and Australian consumers are very concerned about these types of fraud,” the company said.
“It is human nature to be more willing to expend additional time and effort if there is a defined risk or reward for doing so,” said Conroy. “Consumers are more willing to engage in the fraud prevention experience if there is a perceived benefit for doing so or a perceived material risk for failure to act. Without these conditional consequences, human nature takes over and convenience trumps security.”
In the U.S. and Canada, consumers are legally protected from feeling the full burden of fraud losses.
"In the U.S, market, it's a beautiful thing that we have Reg E and Reg Z that protect us (from fraud losses)," Conroy told Bank Info Security. "But at the same time, it makes bringing a more interactive fraud prevention and security experience very challenging. We don't have a lot of consumers who would be willing to put a dongle into their computer and stick an EMV card into it to do a [card not present] transaction. There just would not be that level of tolerance because it would be a complete inconvenience."