According to a new report issued by fraud protection and authentication company Pindrop, 87% of consumers are aware of the threat of phone fraud, but nevertheless are failing to take the most basic steps needed to protect both their identity and their finances from increasingly ‘savvy’ fraudsters.
The research – conducted by Loudhouse, a London-based independent research agency – surveyed 1,000 consumers across the UK. It emerges that, in the last six months, only 18% of Brits have switched on enhanced privacy settings on social media, while just over half have changed their passwords online (54%) or kept their computers updated with the latest anti-virus software (56%).
Matt Peachey, vice-president and general manager at Pindrop, said: “Fraudsters today don’t have to work that hard to gather data because consumers aren’t even taking the most basic measures to protect their online identity. Criminals will always try to stay one step ahead of consumers, and they’re increasingly using social media to learn about their targets. This is leading to an alarming rise in phone fraud across financial institutions.”
In addition, when it comes to banking, more than one-in-four (28%) consumers become frustrated if they have to answer too many security questions.
Balancing good customer experience with security
Martin Hill-Wilson, customer engagement strategist at Brainfood Consulting, explained: “The balance of a good customer experience with a secure service is a critical challenge for banks in particular. It’s clear that consumers are not doing enough to protect themselves. This makes it easy for fraudsters to access consumer data and use it to commit phone fraud. It also demonstrates that there remains a gap in education among consumers that identity theft can occur across multiple channels. Balancing this risk with good customer service is absolutely key.”
As banks grapple with this challenge, 59% of consumers stated that they’re willing to switch banks if one is more secure than others. This is especially important given that the CMA is introducing further measures to make it easier for customers to ‘search and switch’.
Peachey concluded: “Banks must sit up and listen to the fact that their customers are demanding exceptional service without compromising on security. The right authentication and fraud detection must be in place to circumvent attempts by fraudsters to dupe businesses across all their channels without compromising customer experience.”
In addition to consumer approaches to security, Pindrop warns that UK financial institutions face a rapid increase in Call Centre fraud which is making this even more difficult for banks. Its recent State of Fraud Report indicates that such fraud is on the rise, with one-in-700 calls to UK financial institutions now being of a fraudulent nature, illustrating the extent of fraud targeting Call Centres.