Survey Shows UAE Suffers Highest Rate of Card Fraud
A global fraud study of more than 6,100 consumers across 20 countries finds that one in four consumers has been a victim of card fraud in the past five years.
The study, conducted by electronic payments group ACI Worldwide and Aite Group, also highlighted that 23% of consumers changed financial institutions (FIs) due to dissatisfaction after experiencing fraud. Card fraud is comprised of unauthorised activity on three types of payment cards – debit, credit and prepaid.
The March 2014 survey involved a total of 6,159 consumers participating, with around 300 individuals, divided equally between men and women, from each of the 20 countries.
Cardholders experience fraud at very different rates around the globe, and each type of card has unique fraud challenges. The United Arab Emirates (UAE) has the highest rate of fraud overall at 44%, followed by China (42%) and India and the US (41% each).
Among the survey’s other findings:
“Given this latest data, FIs have their work cut out for them, both in terms of educational and preventative measures,” said Shirley Inscoe, senior analyst, Aite Group. “Consumers lack confidence in their bank’s ability to protect them from fraud, so banks must remain vigilant in their fraud migration efforts or face increased customer attrition.”
As organised fraud rings relentlessly develop new methods of stealing funds and identities, consumers are increasingly losing confidence that anything can be done to reverse this downward spiral, say ACI Worldwide and Aite.
The groups report that 23% of respondents changed FIs due to dissatisfaction after experiencing fraud, while nearly 20% lack confidence that their FI can protect them against fraud. Forty-three per cent of those who received replacement cards as a result of data breach or fraudulent activity use their new card less than they used their original.
“Consumers are increasingly concerned about fraud, and are losing confidence on a variety of levels,” said Mike Braatz, senior vice president, payments risk management solutions, ACI Worldwide.
“They are unsure that their FIs can protect them against fraud; they use replacement cards less often due to a loss of confidence in the card or card issuer, after experiencing fraud; and post-fraud, they often change providers or their cards go to back of wallet. This has immediate and long-term implications on customer loyalty, revenue and fee income.”