Fraud victims risk more than money

Digital fraud has significant financial and psychological repercussions on victims, according to Telesign. Businesses may find a new reason to fear digital fraud as the negative impacts of digital fraud on companies’ brand perception and the bottom line.

Trust in digital world

Trust plays a critical role in the digital world. Understanding consumer sentiment around this topic is critical for businesses to build and maintain lasting relationships with their customers.

The researchers underscore the obligation of companies to ensure privacy protections and trust in every digital interaction, while also highlighting what can happen when companies don’t live up to this expectation.

Digital users would go to great lengths to avoid becoming a victim of digital fraud

• 23% of consumers shared that they would rather never eat chocolate again or be audited by the IRS than become a victim of digital fraud.
• 30% of consumers surveyed reported they were victims of fraud in the past three years. Those who spend more time on the Internet and use more digital services are statistically more likely to be victimized.
• 61% of victims report financial losses, and one-third of victims report losses of more than $1,000.
• The impact on victims is not just financial. 40% cite mental health concerns and 44% characterize the incident as being “very impactful” on them.

Consumer fear digital fraud is on the rise

50% of consumers polled indicated their level of apprehension regarding telephone and digital fraud has increased in the last two years.

Strong negative brand impact can multiply, leading to losses in revenue and customer loyalty

• Data breaches, which accounted for 44% of fraud incidents in this study, have a profound, negative impact on brand perception, with 44% of data breach victims telling friends and family not to associate with the brand.
• 43% of data breach victims personally stopped associating with the brand altogether.
• 30% of data breach victims posted to social media regarding the fraud incident, further amplifying negative brand perceptions.
• 59% of victims, who were initially exposed to fraud on social media channels, indicate they are less likely to use social media altogether. Others report they are less likely to use online banking and payment services applications as a result of their experiences.

Protecting digital privacy from fraud

There is strong consensus among consumers surveyed (94% agree) that businesses bear responsibility for protecting their digital privacy. 70% strongly agree that companies have a responsibility to protect users’ digital privacy and 24% somewhat agree. Older respondents are more likely to strongly agree with these sentiments.

55% of consumers polled currently use software to protect their digital privacy. Prior victims of fraud were statistically more likely to use this type of software.

“Trust profoundly impacts how customers perceive and engage with a brand. With fear of digital fraud rising amongst consumers, the value of establishing and maintaining trust in business transactions is critical,” said Kristi Melani, CMO & GTM Strategy of Telesign.

“The challenge for today’s consumer is deciding who they can trust and based on the Trust Index findings, we know they are looking for validation that the companies they engage with are trustworthy. We will continue to monitor the sentiment of the consumer with our Trust Index research to better understand how and where trust plays in their journey. The most trusted businesses will be those that employ the latest technologies to create environments that make Continuous Trust a reality,” Melani continued.

“Protecting digital identities and building security into daily life is a massive concern for businesses,” said Daniel Newman, founding partner and principal analyst at Futurum Research.

“Doing this effectively requires the proper balance between security and user experience. Telesign continues demonstrating invaluable leadership in solving this challenge and making the digital world safer for everyone,” Newman concluded.