Marqeta, the global modern card issuing platform, today released the findings of a survey of over 4,000 UK and US consumers, looking at their attitudes to, and experiences of, financial fraud. 96% of UK respondents report having concerns about fraud, but more than two fifths (42%) said they accept fraud as a cost of living in an increasingly digital economy. A further 35% reported that they accept being a victim of fraudulent transactions is ‘inevitable’, with 29% saying they believe the risk of fraud is a ‘fair trade-off’ for the convenience of a more seamless digital economy.

Marqeta’s survey showed that fraud is becoming an increasingly common fact of life for UK consumers; 38% reported having been the victim of financial fraud, with 1-in-5 falling victim in the last 12 months. The survey also showed that people are somewhat split in terms of who is responsible for preventing fraud; 57% of UK respondents think it’s their own responsibility to protect themselves from fraud, while 43% think it’s the banks’. Despite this, the data suggests UK citizens could be doing more:

• Over half of consumers (52%) admit they could be better at protecting personal financial information, while 1 in 20 UK consumers say they never think about it.
• Only 34% check online to see if their card details have been exposed following a major data breach – considerably lower than the 60% of US respondents that do the same.
• 76% believe shopping online puts them at a higher risk of fraud, with 50% regularly worrying about entering card information online – but 85% still made a purchase online in the last month (a figure that is likely to be even higher presently, with citizens in enforced lockdowns)
• 14% regularly lose their card (at least every year) with 1 in 20 admitting to losing their card every few months. While 85% always cancel their card when this happens, only 23% do so immediately – despite the fact 82% of those that have been defrauded said it happened within an hour of them losing their card.

“We are living in very unusual times, with most of the country under state-imposed lockdown to some degree. Against this backdrop, fraudsters are unfortunately thriving, and we have seen numerous warnings and scams being conducted by people who want to take advantage of the situation. So people need to be on guard even more than ever,” comments Ian Johnson, Managing Director (Europe) for Marqeta. “Yet this research shows that, while many people are taking steps to protect themselves, there is still a significant portion that are not. This may be because they have become resigned to the inevitability of fraud, but it may also be because they are often insulated from the consequences – as the survey also showed that 92% of people who had been defrauded had been able to get fraudulent transactions removed from their account. This means the banks are often carrying the financial burden of fraud.”

Almost two fifths (39%) of UK respondents said they had been proactively alerted to fraudulent activity on their account by their bank before they noticed themselves. A further 83% said they think their bank does a good job at alerting them to fraud, although 70% feel like banks could be more accurate when it comes to predicting fraud.

When disputing charges to an account, most people (53%) deal with the issue by calling customer services. However, almost one in five (19%) have opted to go into a physical branch to report it. Interestingly, this figure was higher than those that used their banking app (18%) or website (12%) to report fraud. This apparent aversion to technology extended to perceptions of risk around payment methods: 53% said the risk of fraud makes them less likely to try out new digital forms of payment, such as a mobile wallets, while 80% believe physical cards are more secure than mobile wallets.

“Despite people becoming increasingly tech-savvy, when it comes to fraud and security, we are often creatures of habit who prefer a more traditional approach,” Johnson continues. “People wrongly believe a physical card is more secure than a mobile wallet, for example – even though, logically, what are you more likely to notice has gone missing, a card or your phone? However, this research was conducted before the current coronavirus and subsequent measures had taken effect. Since restrictions on movement and shopping have been put in place, many have been pushed to change their habits and try new things. So it will be interesting to see the long-term impact on tech adoption and trust.”

“Ultimately, fraud is a sunk cost for banks, so preventing fraudulent transactions in real-time – before the money leaves the customer account – needs to be a priority. The best way to do this is through having cards that have the capacity to ‘think’ and use contextual data to make judgements on fraud during the transaction process, rather than after the fact. The only way to do this is through a modern payment platform.”