Should Consumers Be Less Concerned About ID Theft?

  • Fraud Prevention, Identity Theft

According to new research from Cardbeat as outlined in a recent press release, consumers are less concerned about ID Theft and more confident about their financial institutions ability to prevent and notify consumers of breaches. Still, a majority (64%) of U.S. consumers still see identity theft as a growing problem, down from 72% in 2007.

Merchants, processors and financial institutions have made extraordinary strides in recent years to authenticate customers and prevent fraudulent transactions. Much of the decline in concern (or increase in confidence, depending on how you look at it) has to be given to these institutions and their response to the market. Still, 64% of the population believes ID theft is a problem, and one can only infer that that shows some lack of confidence in general fraud prevention strategies. Multi-factor online authentication has become a mainstay, authenticating customers with predefined questions as well as something they have such as a text to a cellphone or a cookie in a browser. Thats an improvement, but it stops short of truly identifying a customer. After all, cell phones are easily stolen and computers cache are rarely emptied.Merchants and financial institutions should look to out-of-wallet questions to further authenticate customers as part of their multi-factor approach. Its cheap, reliable, and proven effective.

[Contributed by Jeff Davis, President & CEO]