Rising fraud is damaging consumer trust

StockRocket / iStock / Getty Images Plus via Getty Images

In response to numerous cyberattacks and data breaches affecting major organizations, consumers have shown a shift in digital trust. According to an Experian report, more than 52% of consumers feel like they’re more likely to be an online fraud target than they were a year ago. Additionally, 32% of consumers report being “very concerned” with online security.

Concern over identity theft is highest within adults between 55 and 69, with 85% reporting concern in comparison to 52% of respondents between 18 and 39. On the business side, 75% of organizations report confidence in their ability to protect against all kinds of fraud. Additionally, nearly 70% report that fraud losses have increased in recent years.

Authorized push payment (APP) fraud was reported as the leading fraud event in 2023, experienced by 40% of businesses. APP fraud is when a fraudster deceives a consumer by “persuading them to willingly deposit funds into the fraudster’s account, or the account of a complicity third party.” Transactional payment fraud was the second-most frequent attack at 34%. These events are leading organizations to increase their security investments. According to the report, businesses plan to increase fraud management budgets between 8% and 19%.

According to the report, 85% of consumers report that physical biometrics are the most trusted and secured authentication method. Of the five most encountered security methods (passwords, security questions, account usernames and contact information), security questions was the only method featured in the list of most trusted solutions. Seventy-four percent of consumers report personal identification number (PIN) codes sent via text or email as a secure method of authentication.

Eighty-five percent of consumers expect businesses to respond to identity and fraud concerns. Additionally, 71% of consumers say it’s very or extremely important for businesses to be able to identify them online. Building consumer trust is essential for a business to maintain operations, meaning security leaders should factor consumer behaviors into their security strategies.

Looking for a reprint of this article?
From high-res PDFs to custom plaques, order your copy today!

Taelor Sutherland is the Associate Editor at Security magazine. Sutherland covers news affecting enterprise security leaders, from industry events to physical & cybersecurity threats and mitigation tactics. She is also responsible for coordinating and publishing web exclusives, multimedia content, social media posts, and a number of eMagazine departments. Sutherland graduated in 2022 with a BA in English Literature from Agnes Scott College.