Study: Consumers Dissatisfied With Lax Merchant Fraud Practices

By Pete Rizzo (@pete_rizzo_)  

U.S. consumers don’t believe merchants are taking adequate steps to protect their information during purchases, the latest Jumio Consumer Insights Study found.

The report indicated that nearly half – 44 percent – of all U.S. consumers have chosen not to sign the back of their credit and debit cards, an activity it suggested signals that Americans are actively attempting to encourage merchants to verify their identity.

“Regardless of the explicit consumer demand, too many merchants are not taking the necessary actions to confirm that a person conducting a transaction is actually who they say they are,” Marc Barach, chief marketing and strategy officer at Jumio, said in an October 24 statement.

In its official release, Jumio suggested that its data has gained further relevance in light of its finding that more than 25 percent of Americans report having been the victim of a fraudulent charge made to their bank account or credit card.

Eighty-seven percent of survey respondents reported that they are not asked to present proof of identification at the point of sale when making a purchase with a credit or debit card. The study was conducted with the input from more than 2,000 U.S. adults this September, and coincided with a similar study of 2,000 U.K. consumers.

For a closer look at what consumers in both the U.S. and the U.K. are saying about their point of sale experiences, we break down Jumio and Harris Interactive’s latest payment fraud surveys to learn more.

Consumers Say Merchants Fail To Provide Basic Protections

Jumio found that 44 percent of U.S. consumers elect to write “see ID” on the back of their credit and debit cards. Yet, despite this, U.S. shoppers say they are seldom asked to present their ID. No data was available for U.K. consumers due to widespread use of chip-and-PIN technology.

Interestingly, U.S. consumers were more likely to have been the victim of a fraudulent charge. Twenty-six percent of U.S. consumers reported that they had been affected by this crime compared to 19 percent of U.K. consumers.

Generation X Most Likely Fraud Victims

The study also provided a look at which U.S. demographics were most likely to fall victim to fraud. Thirty-three percent of consumers aged 35 to 44 years old reported prior issues with fraud, the highest of any age group.

Younger consumers, aged 18 to 34, were the most likely to report using someone else’s debit or credit card to make a purchase. Fifty-one percent of consumers in this demographic reported having taken this action, compared to 16 percent of those 55 and older.

Consumers Call For Digital Identification Acceptance

Interestingly, despite the disparate point of sale environments in the U.S. and the U.K., consumers in both countries reported a desire for digital solutions to their fraud concerns. Thirty-two percent of U.S. adults said they would prefer to carry a digital image of their license or ID on a smartphone rather than a physical copy in their wallet.

Figures were slightly higher in the U.K., where 38 percent of U.K. adults would prefer this option to traditional forms of identification.

For more insights into the point-of-sale habits of U.S. shoppers, read Jumio’s full report summary here.