FICO Survey: Overconfidence Could Put UK Consumers at Risk from Scams

FICO’s latest survey reveals consumers are more worried about identity theft than scams; one in four feels there aren’t enough security checks

Highlights

  • Banks’ education on scams not cutting through – only 6 percent of consumers are worried they could be tricked into sending a payment

  • 25 percent of consumers are more likely to use real-time payments now than a year ago

  • 56 percent plan to do all their banking through apps or websites in future

  • 25 percent say there are not enough security checks on online transactions, and 34 percent say the same for in-store purchases

As more payments are made online, new research from global analytics software firm FICO suggests that consumers are overconfident about their ability to spot a scam. When asked which type of fraud worries them most, just 6 percent said being tricked into making a payment to a fraudster. By comparison, around 25 percent of respondents said they were most worried about a fraudster using their details to open an account, and the same amount were most worried about a fraudster taking over an existing account.

“Consumers in the UK are much more confident making payments online and banking from anywhere,” said Matt Cox, Vice President and General Manager, EMEA, FICO. “But they underestimate the abilities of criminals to create persuasive scams. Fraud where people are tricked into sending money to criminals is rising in the UK, and around the world. When consumers think they’re too smart to be tricked, banks’ efforts to educate them can fall on deaf ears. To protect customers, banks need better ways to identify such fraud. By using analytics that detect out-of-pattern behaviour, banks can uncover the evidence of such scams and prevent the payments reaching the fraudsters.”

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“Consumers in the UK are much more confident making payments online and banking from anywhere”

“Financial service providers face the tough task of balancing security with customer convenience, meaning they are constantly working to improve fraud controls while minimising user friction,” said Mike Haley, Chief Executive Officer of Cifas, the UK’s leading not-for-profit fraud prevention membership organisation. “Identity fraud and account takeover levels in the UK increased last year, and so it’s critical that customers realise the threat that fraud poses to them and take steps to protect themselves.”

Confidence in Fraud Protection

The survey of 1,000 UK consumers also showed that the majority were happy with the current security measures offered by their financial services providers. In the survey, 73 percent said their bank does enough to protect the money in their accounts. The figure was slightly lower (69 percent) for people aged 18 to 24.

When it comes to making payments online using a credit or debit card, one in four people surveyed think there are not enough security checks when they make a payment online. Younger people were more concerned, and people aged 25 to 34 were the most likely to say more checks are needed (32 percent).

“More checks on online purchases are expected in March, which is the new deadline for Strong Customer Authentication checks set by the UK’s Financial Conduct Authority,” said Cox.

Security satisfaction levels dropped when respondents were asked about card payments in- store, with one in three people saying there are not enough security checks. The youngest respondents (aged 18 to 24) were the most concerned, with 43 percent saying there aren’t enough checks, compared with just 32 percent for people aged 55 or older.

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Real-Time Payments Growth

When asked about payments that are initiated and settled almost instantaneously (real-time payments such as UK Faster Payments), 25 percent said they are more likely to use them now than a year ago. This trend towards digital payment preferences continues into online banking, with 56 percent of respondents saying they will continue to do all their banking through apps or websites.

35 to 44-year-olds are the most likely (38 percent) to use real-time payments, closely followed by 25 to 34-year-olds (35 percent), and 18 to 24-year-olds (33 percent).

The biggest irritations consumers say they face with banking security is when they are asked to authenticate their identity in different ways, and when cards are blocked for legitimate purchases (19 percent).

“When we take the whole survey into consideration, there is a pressing need for banks to find the right balance with security checks and consumer education” concluded Cox. “It is clear that despite the rising frequency and intricacy of fraud attacks, consumers will feel overwhelmed and annoyed if they are expected to engage with excessive security measures.”

FICO surveyed 1,000 UK consumers aged 18 to 85 as part of a global survey in late 2021. The survey also included consumers in Brazil, Canada, Chile, Colombia, Germany, India, Indonesia, Mexico, South Africa, Thailand and the USA.

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