Nearly Two-Thirds of Consumers Say Fraud Incidents Damage Brand Trust and Loyalty

Telesign, the leading provider of customer identity and engagement solutions, released new data from its 2024 Trust Index Report. Among the new findings, the study revealed that fraud harms consumers financially and emotionally and inflicts lasting damage to brand reputation and customer relationships.

Nearly all consumers (92%) believe that the companies they engage with are responsible for protecting their digital privacy. Moreover, 64% of global consumers report that fraud incidents negatively impact their perception of the brand responsible for the breach. In the U.S., 58% of fraud victims share this sentiment, with 38% completely severing ties with the compromised brand. Additionally, one-third of victims (33%) actively discourage friends and family from engaging with these brands, while 20% take their grievances to social media platforms.

“Today’s consumer is sending a clear message: protecting their digital identity is central to their willingness to do business with a brand,” said Christophe Van De Weyer, CEO of Telesign. “Our new report illustrates that brands that fail to protect the digital identity of their customers aren’t just risking data loss; they’re risking their reputations, customer loyalty and long-term growth potential. In our more interconnected world, companies stand to gain by emphasizing trust and protection as foundational attributes of the customer experience. There is no longer an excuse for companies to not adopt extra security measures, such as multi-factor authentication, as an overwhelming majority of consumers welcome friction to protect against fraud and provide a sense of security.”

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The human cost of fraud

The impact of fraud extends far beyond financial consequences. While 47% of global fraud victims experienced financial repercussions, including lost savings and stolen bank information, the study revealed a significant personal toll. Globally, 34% of victims reported mental or physical health repercussions, including anxiety, depression, and stress. Additionally, 21% faced social repercussions, and 20% experienced physical safety concerns.

These negative experiences dramatically affect digital behavior. Following fraud incidents, 65% of global victims reported being less likely to use social media, 64% reduced their use of payment services, and 56% decreased their e-commerce activities. The study found that nearly half of all fraud victims (49%) considered their most recent fraud attack as life-altering or very impactful.

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Consumers embrace security measures

The specific consequences of fraud are varied and severe. In the U.S., 35% of incidents resulted in stolen money, 29% in stolen account access, and 25% in unauthorized purchases. Identity theft affected 22% of victims, while 21% experienced account impersonation.

Despite potential friction in the user experience, an overwhelming 80% of global consumers believe that security measures such as multi-factor authentication are necessary for protection against fraud. This figure stands at 77% in the U.S., indicating that there is a clear distinction between good friction and bad friction when it comes to securing against fraud.

The 2024 Trust Index underscores the urgent need for businesses, governments, and individuals to prioritize trust and security in the digital world. Telesign connects, protects, and defends companies, customers, and the digital interactions between them. Harnessing intelligence from more than 2,200 digital identity signals, Telesign’s AI models empower companies to transact with their customers free of fear, enabling the promise of the digital economy. Telesign helps its customers prevent the transmission of 30+ million fraudulent messages each month and protects 1+ billion accounts from takeovers yearly.