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FICO survey finds consumer fears tied to bank fraud and identity fraud

Aug 30, 2017 Philip Burgess

FICO survey finds consumer fears tied to bank fraud and identity fraud

New FICO research discovered that U.S. consumers are more fearful of identity theft and bank fraud than terrorist attacks.

While there's good reason for consumers to fear becoming a victim of identify theft or bank fraud, this predisposition impacts their decision to seek out credit options with retailers and other businesses.

Companies that extend consumer credit need to instill confidence in their clientele and assure them their sensitive personally identifiable information (PII) is secure.

The latest FICO data

The FICO report revealed 44 percent of U.S. consumers said their top concerns were banking fraud and identity theft. Fortunately, 78 percent of respondents who were victims of fraud said their bank's response satisfied their expectations.

In comparison, only 18 percent of percent of respondents cited fear of being a terrorist attack victim, while 22 percent said they primarily worried about their own death or that of a loved one.

Identity theft is a far more frightening concept for Americans than terrorism.

Despite the satisfaction rate of consumers who said they approved of their bank's reaction to fraud and theft, the worry is all too real for consumers. This will cause the public to be significantly less inclined to seek out new credit options, and they may become more unwilling to provide sensitive PII to businesses and retailers offering credit. 

"Human beings hate to lose," explained Bob Shiflet, vice president of FICO's fraud business line. "The survey confirms the psychology of loss aversion, especially when it comes to money and the likelihood of an event happening to us. The loss of your personal information or money from your account cuts deep, it is a violation, and people now know it's much more likely to happen to them."

With identity theft and bank fraud striking millions of victims each year and causing billions in losses, it no should come as no surprise that consumers are concerned about their PII falling into the wrong hands. The 2017 Identify Fraud Study, released by Javelin Strategy & Research, discovered that 15.4 million U.S. consumers fell victim to identity theft in 2016, leading to $16 billion in losses.

In this environment, companies need sophisticated tools that can protect both themselves and their customers' data. Further, it's important that these organizations have a means to check the information received on credit applications to ensure that it's correct. 

Utilizing ID Verify to ensure security

Businesses extending consumer credit can utilize ID Verify to accurately verify consumer PII and assess an applicant's risk for identity fraud. 

From a Social Security number to driver's license information, ID Verify confirms more than 60 different aspects of an applicant's PII data. Further, ID Verify cross-checks this information against multiple high-risk attributes that cover money laundering and other indicators of potential fraud. 

With a more secure applicant check and identify verification process, retailers and businesses can more easily ensure they are not extending credit to identity thieves or other financial fraudsters. By helping to reduce the overall rate of these incidents, ID Verify can ultimately boost consumer confidence and make them more likely to seek out consumer credit options.