Tuesday, 16 October 2012

Global card fraud on the rise


In a survey commissioned by ACI across 17 countries, one in four cardholders has been hit by card fraud in the past 5 years, prompting many to ditch their provider.


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 markets involved in the survey include:

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, South Africa, Sweden, the United Arab Emirates, and the United Kingdom

The Asia-Pacific: Australia, China, India, Indonesia, and Singapore

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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