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Consumer Fraud Study Reveals Rising Concerns and Changing Expectations in the Age of COVID-19

Fraud, Bribery & CorruptionConsumer Fraud Study Reveals Rising Concerns and Changing Expectations in the Age of COVID-19

The COVID-19 pandemic has unleashed a surge in scams, creating heightened concern about fraud among the public. This wave of fraud is also reshaping people’s expectations regarding organizations’ responsibilities in protecting them and the compromises they are willing to make to enhance security, according to a consumer fraud study conducted by AI and analytics leader SAS.

Titled “Faces of Fraud: Consumer Experiences With Fraud and What It Means for Businesses,” the study surveyed 13,500 consumers across 16 countries, revealing the extent of the global fraud problem:

  • 70% of consumers reported experiencing fraud at least once, with 4 in 10 falling victim to fraud multiple times.
  • Almost half (47%) noted an increase in fraud experiences in 2022 compared to previous years.
  • A significant majority (86%) admitted to being more cautious about fraud than in the past.

The most common fraud tactics reported by respondents included attempts to obtain banking details or personal data, often initiated through mobile phones and email.

Stu Bradley, Senior Vice President of Risk, Fraud, and Compliance at SAS, emphasized the inadvertent role played by organizations, particularly in highly targeted industries like banking, insurance, government, retail, and telecommunications, when fraudsters succeed in their exploits. Bradley noted that two-thirds of consumers surveyed would change service providers due to fraud or if another provider offered better fraud protections, highlighting the potential consequences of inaction.

Consumers’ shifting attitudes underscore the importance of robust fraud defenses, with 89% of respondents believing that organizations should do more to protect against fraud. The study also revealed that most customers are willing to make trade-offs for enhanced security:

  • 75% are open to more delays and checks in transactions for better fraud protection.
  • 80% are willing to use biometric methods like facial recognition, hand geometry, retinal identification, or voice recognition for payments and transactions.
  • 57% prefer using unique identifiers like biometrics for authentication at the time of the transaction instead of remembering fixed passwords.
  • 70% are willing to share more personal data (e.g., location, behavior) with service providers if it’s used to bolster anti-fraud measures.

The study highlighted the growing importance of AI-enabled fraud detection, which can strike a balance between a seamless customer experience and effective fraud prevention. AI can help organizations detect fraud earlier and faster, improving efficiency and accuracy in real-time fraud detection and prevention efforts. Unlike traditional rule-based systems, AI can identify anomalies in real-time and adapt to evolving threats.

SAS, a leader in AI and analytics, is committed to advancing technology in this field and recently announced a $1 billion investment in industry-tailored AI solutions.

In conclusion, the study underscores the significant impact of fraud on consumers and the changing landscape of expectations regarding security measures. Consumers are willing to cooperate with enhanced security measures, and organizations can leverage AI to provide effective protection while maintaining a positive customer experience.

By FCCT Editorial Team

Disclaimer: The views expressed in this article are independent views solely of the author(s) expressed in their private capacity.

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