Consumers hold retailers - not banks - to blame for data breaches
18 March 2014 | 1844 views | 0
Feedzai, a big data science company that uses real-time, machine-based learning to prevent fraud, today announced the results of their nationwide survey of U.S. adults, which found that 60% of those who knew about any data breaches at notable retailers, such as Target and Neiman Marcus, hold the merchant responsible for preventing future incidents of a data breach.
The "2014 Consumer Reaction to Financial Data Breaches Study" also found that 43% think nothing is more aggravating than getting credit/debit card data stolen.
The study was conducted online by Harris Poll on behalf of Feedzai in January 2014 among 2,047 U.S. adults age 18 and older.
"Fraud prevention is now a matter of predicting complex consumer behavior based on changing sentiments," said Dr. Pedro Bizarro, chief data scientist of Feedzai. "These findings show that consumers believe it is the merchant's responsibility, but really it is a collective problem that the industry needs to understand in order to distinguish customers from criminals and keep payment data safe."
Who's to blame?
Among U.S. adults who are aware of any data breaches, 60% believe merchants are responsible for preventing future incidents, while 13% believe responsibility falls on banks.
Only 5% of these adults feel it is the consumer's responsibility, and among males age 18-34, that increases to 10%.
20% of these females age 18-34 believe the government bears the responsibility, while 13% of all those who are aware of any data breaches feel the government is most responsible.
Getting the flu > credit card stolen
It seems many consumers find getting their credit or debit card stolen more aggravating than a number unpleasant activities, and in fact 43% of U.S. adults feel that nothing is more aggravating than theft. The survey also found:
20% of Americans think losing their cell phone is more aggravating than card/debit card data theft; in the Northeast that figure drops to 15%, and it jumps to 30% among females age 18-34
20% feel getting the flu is more aggravating, which jumps to 25% for Americans age 35-44
14% of Americans find being stuck in rush hour traffic more aggravating
13% of Americans found going to the DMV more aggravating, while 12% say serving on jury duty and 11% thought preparing income tax returns was more aggravating than credit/debit card dg than credit/debit card data theft
All eyes on data breaches - and merchants
Consumers took notice of the recent retailer breaches over the holiday season and fraud is top of mind.
While the recent data breaches happened in physical stores, over half (52%) of U.S. adults who are aware of any data breaches still believe shopping in a physical store is safer and more secure than shopping online when using debit or credit cards.
Over 1 in 5 people (22%) who are aware of any data breach changed their shopping behavior due to recent retail data breaches. The highest proportion of those making a change in shopping behaviors came from those aware of data breaches in the Midwest, with 26% reporting changes, while the lowest proportion of those reporting changes came from those in the West with 19% reporting changes in shopping behavior due to recent data breaches.
Nearly 3 in 10 (28%) U.S. adults who are aware of any data breach have stopped shopping at the affected retailers. Among those aged 35-44, the proportion increases to nearly 4 in 10 (36%).
What is old is new again. Cash is back
While memories of an older generation stuffing cold hard cash between their mattresses and in envelopes may seem like the thing of the past… it may not be the case.
While 40% of those aware of any data breaches say they started using cash for more of their purchases when shopping, the proportions rise for those aged 18-34 (43%) and those aged 35-44 (45%).
32% of those who are aware of any data breaches aged 65 and older say they are using more cash.
A youthful outlook
Younger generations appear to expect the risk of using credit cards.
While over half of those aware of data breaches (51%) believe data breaches are an expected part of the experience when shopping with credit or debit cards, there are sharp distinctions between age groups.
Almost 3 in 5 (58%) of those who are aware of data breaches between the age of 18 and 34 believe data breaches are part of the shopping experience, while only 38% of those who are aware of data breaches age 55-64, believe that is true.
Willing to help
Social media is a place where consumers are checking in - over 1.8 million times a day on Facebook alone - and these check-ins can be helpful in providing activity or location information that is useful in authorizing financial transactions. One in five (18%) consumers with a social media profile and aware of recent data breaches would be likely to include their bank as connections on their social media list of contacts.
"While it's great to see that consumers are thinking about connecting with their banks, more consumers would be willing to connect if banks can provide the right incentives," forecasts Dr. Bizarro.
Feedzai recently unveiled is Feedzai Social Connector an API that offers a way for consumers to discretely connect their social media accounts like Facebook or Twitter to their mobile banking applications. Consumers can privately check in with their financial institutions to alert their bank of activity and location, which allows for greater control of false positives, for example, while traveling or conducting out of character behavior.
This survey was conducted online within the United States by Harris Poll on behalf of Feedzai from January 28-30, 2014 among 2,047 adults ages 18 and older. This online survey is not based on a probability sample and therefore no estimate of theoretical sampling error can be calculated.