News

US consumers will switch banks for greater fraud protection

Wednesday 10 November 2004 22:23 CET | News

New research conducted by Unisys Corporation shows that U.S. banks are at risk of a customer exodus as a result of growing consumer awareness of identity theft issues.

The study found that nearly half of U.S. households would be willing to switch their accounts to financial institutions that offer stronger theft detection and alert services. Banks face mounting pressures not only to improve identity theft prevention, but also to help customers better understand how they can combat fraud. While trust in banks remains high (84 percent of consumers believe their banks are doing all they can to prevent identity theft), the Unisys research points to rising fears: more than half of those surveyed are worried about the safety of their money. The study found that one in five U.S. households - more than 21 million - have been directly affected by identity theft. The Unisys study found that nearly two-thirds of U.S. consumers believe it is possible for banks to prevent fraud before it occurs, and more than three-quarters (78 percent) believe it is a banks responsibility to do so. Consumers, however, are not enthusiastic about bearing the cost of identity theft protection, with only 27 percent at least somewhat willing to pay extra for these services. Despite consumers strong beliefs in their financial institutions ability and responsibility to prevent fraud, a separate Unisys study of branch service representatives in the 100 largest banks in the U.S. raises questions about what protective measures banks take, and how financial institutions communicate their identity theft prevention to customers. While most branch representatives say their banks do take actions to deter identity theft, specific knowledge of these measures is unclear. Only 14 percent say that their institution has a dedicated department monitoring account activity, and 15 percent say their bank does not do anything special to prevent theft. A mere one percent report that their bank provides special identity theft training for employees. Identity theft customer education offered by banks appears equally low. Fewer than 10 percent of branch representatives mention having special identity theft collateral to give to customers, and only three percent cite any offers or promotions around identity theft or security. When it comes to one of the simplest measures of protection, only three percent suggested that the customer contact a credit reporting agency. Survey Results: Consumer Survey * One-fifth of all U.S. households (more than 21 million) have been directly affected by ID theft * Nearly half of U.S. households would be willing to switch accounts to financial institutions that offer stronger theft detection and alert services * 84 percent of consumers trust that their banks are doing all they can to prevent ID theft * Nearly two-thirds of consumers believe it is possible for banks to prevent fraud before it occurs, and 78 percent believe it is a banks responsibility to do so. * More than 50 percent of consumers worry about the safety of their money; 15 percent worry a lot * Consumers are not enthusiastic about paying for ID theft detection and alert services with only 27 percent at least somewhat willing to consider a fee Mystery Shopper Bank Survey * 15 percent of branch service representatives say that their bank does not do anything special to prevent ID theft; only 2 percent report that their bank provides ID theft training for employees * 69 percent say they close or freeze accounts only at the customers request *Only three percent cite any offers or promotions around identity theft or security * 91 percent say that their institutions have never experienced phishing attacks


Free Headlines in your E-mail

Every day we send out a free e-mail with the most important headlines of the last 24 hours.

Subscribe now

Keywords: ,
Categories: Payments & Commerce | Payments General
Countries: World
This article is part of category

Payments & Commerce