Reports: Consumers Will Give ‘No Second Chances’ on Fraud during Holidays

Reports: Consumers Will Give ‘No Second Chances’ on Fraud during Holidays

November 27, 2019

When it comes to fraud, there are no second chances—consumers will take their business elsewhere if they fall victim on any platform or web site. This, according to new reports from Ekata and Terbium Labs. 

If consumers do experience fraud on a company’s platform, 91 percent say they likely won’t use that company again in the future, while 86 percent say they will tell others about their fraudulent experience. This according to an Ekata report, titled Infinite Want: Consumers Demand Speed and Security in the Digital Experience. The research includes interviews with employees of marketplaces, banks, online lenders and digital payment processing platforms, as well as a quantitative survey of 7,000 consumers.

Consumers also said they have very high demands for online experiences, with 73 percent responding that when they are trying to create an account or process a transaction on a modern digital platform (i.e., online lending, payment, e-commerce site or marketplace, etc.), the process should happen instantaneously. The results also reveal the penalty for failing to deliver a fast experience—66 percent said they have abandoned their account opening or transaction on at least one occasion due to friction, including an overly long process.

Most respondents, 92 percent, said they expect a fast, frictionless experience while also getting one that is as trustworthy and secure as possible. More than three in five (61 percent) consumers believe that responsibility for avoiding fraud lies with the companies that have access to their personal data.

The Ekata results are in line with another new survey of consumers titled How Fraud Stole Christmas from Terbium Labs, which found that a 68 percent of shoppers said they would hold their bank at least partly responsible for fraudulent activity, regardless of how the compromise occurred. Just over half of holiday shoppers (51 percent) say they'd blame both the original source of the data compromise, such as a retailer, and the financial institution that issued the payment card, while another 17 percent say they'd only hold their financial institution responsible regardless of how the compromise occurred.

According to the data, this will have a direct impact on the bottom line as financial institutions stand to lose 45 percent of their customer base if data is compromised over the holidays. This includes 19 percent of shoppers who say they'd leave the bank and close their account following a data breach, and another 26 percent that would only keep their accounts if their financial institution took specific actions to improve security.

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Joan Goodchild