A Finextra member 17 November, 2009, 09:36 0 likes

"Are UK consumers becoming apathetic to the threat of identity fraud even as they continue to fall victim in ever increasing numbers, or conversely, has the financial services industry done enough to educate consumers about the threat of this insidious crime?"

Have you seen the movie "Confessions of a shopaholic"? At one point in the movie, Rebecca Bloomwood (played by Isla Fisher) was reviewing her monthly credit card statement. She showed dismay for each transaction she recognized and started celebrating when she saw a transaction that she thought she did not make. That celebration was cut short after her co-worker explained that they all chipped in to buy a gift for a co-worker and gave the money to Rebecca. Hence, Rebecca bought the gift by charging it to her credit card.

Rebecca's mood changed to happy because she thought that someone had used her card account fraudulently. It's a credit card and this really wasn't her money. She was ready to call her bank to dispute the entire bill. 

This scene in the movie is quite telling of credit cardholders apathy towards identity theft. It could also very well apply to any credit account. It's the banks' money, not the consumers' money!

I think that it would be quite logical to conclude that consumers do have a different reaction about identity theft when it concerns their own money. Consumers are the opposite of apathetic when it concerns prepaid cards, debit and ATM cards.

A Finextra member 18 November, 2009, 11:24 0 likes

A curious state of affairs indeed. The average retail account holder doesn't give a damn because the odds are the bank or credit card company will refund them and foot the bill for the fraud. When they do have their identity stolen, they are naturally angry because someone didn't protect it for them, and confused because there isn't a breakglass solution to get it back.

But why should the industry always pass the metaphorical buck to the customer? It isn't yet more "customer education" that's needed since they are already overburdened with cries to eat better, play nice on the internet, exercise, vote, hide their PIN at terminals etc etc.

The financial services industry should recognise the fact that they are in the trust business, and trust goes with security. If the industry made greater efforts to ensure the requests for credit come from the genuine identity then the problem would largely go away.

A Finextra member 18 November, 2009, 12:16 0 likes

I would like to think lenders have learnt from the current climate and are more stringent on lending and application rule bases are NOT changed significantly.

This however does not help with the number of data compromises on line. The first thing a victim will say to me is

Victim "How has this Happened?"

Answer , "Likely to be on the internet"

Victim Response "I only use secure sites"

Thaty may be so but that doesn't stop Website merchant attacks we see or hear so much about and is all kept hush hush from the general public.

I think the education is there to an extent but maybe should be more publicy available so possible undetected victims can be more alert to their account runnings.

It also doesn't help consumers are turning more to paperless options, here we are relying on them to check statements for unusual activity. These consumers too would be less likely to notice their address has been changed as they wouldn't be receiving their statements.

A Finextra member 18 November, 2009, 15:13 0 likes

Education isn't enough-it's time we focus on empowerment, by giving individuals controls and real-time information over their accounts and identity records. Financial providers and vendors will enjoy the benefits of acquisition, cross-sell and loyalty as they share control with account-holders, teaming up to fight a common criminal. Current banking systems are paternalistic, and if education is the primary solution then we're in a sorry state of affairs. Consumers know what's best, and contrary to common reports there is nyet a shred of evidence to suggest that zero-liability provisions reduce consumer motivation to protect themselves. Give power to the identity-holders and they'll vote with their wallet, and meanwhile identity criminals will lose in the "two-against one" battle. We publish a report ("Safety Scorecard") that ranks top US banks and issuers on 50 individual customer-involved safety criteria, and it's a detailed, research-based roadmap of what features (not just education) are required to do this.