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Card Fraud Hits 1 in 4 Consumers, but Most Are Satisfied by Bank Response

(New York, NY):  Over one-quarter (26%) of US consumers report having experienced credit and/or debit card fraud in a newly released study conducted in Cardbeat,® Auriemma Group’s syndicated research publication. Among fraud victims, one in five (20%) said that their fraud experience was directly linked to a data breach that became public knowledge.  Most consumers discover fraudulent transactions while reviewing their monthly statements, and erroneous retail charges are the most common type of fraud experienced, cited by 80% of those who report experience with card fraud.

Despite the rising incidence of fraud on payment cards, few consumers state that the experience has affected their willingness to use their debit or credit cards, a response that can be attributed their banks’ responsiveness. Three-quarters of consumers who reported having experienced payment card fraud stated that they were “very satisfied” with their bank’s response, and another 20% were “somewhat satisfied.”  Most (76%) consumers who experience card fraud were issued a brand new card with a different account number, and 65% say their account was credited for the disputed charges.

“For the most part, consumers seem to tolerate the fact that fraud is a potential risk of using payment cards, and most are appreciative of card issuers’ willingness to protect them from major security issues.  For example, 72% of all consumers who have experienced an unplanned card reissue say that their perception of their financial institution was positively influenced by the issuer response,” noted Marianne Berry, Managing Director of the Payment Insights practice. “However, the rising incidence of data breaches means that mass reissuance of cards is becoming more frequent, and some consumers have had their cards replaced multiple times in a short time frame.”  She noted that while overall satisfaction is high among those who receive new cards after a fraud incident, one-fifth (19%) of respondents report that they’ve received new credit cards due to fraud twice or more in the recent past, and their perceptions tend to decline with each subsequent reissue.

Ms. Berry says that banks still have opportunities to improve already-positive consumer perceptions.  She says “Involving marketing people in the correspondence may be an opportunity to improve the process for all parties involved.”  She noted that if the letter accompanying a new payment card is clearer about the reason a new card is being sent, consumers may be more likely to view the decision positively, regardless of how many times they’ve had cards reissued, adding that “providing consumers with a checklist of their recurring payment arrangements can also help reduce the hassles associated with switching card numbers.”

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