In 2024, too many consumers have been touched by fraud. Whether it’s been through phishing emails or texts, social media scams, card cloning and other bank frauds or even sophisticated “catfishing” scams, fraud attempts are almost a daily occurrence. And when the fraud is the result of breaches of data privacy at companies, this can negatively affect customers’ trust of the companies with which they do business.
Customer identity and engagement solutions provider Telesign recently released new data from its 2024 Trust Index Report.
The study found conclusively that fraud significantly harms consumers financially and emotionally and inflicts lasting damage to brand reputation and customer relationships. While nearly all customers (92%) believe that the companies they engage with are responsible for protecting their digital privacy, more than two thirds (64%) reported that fraud incidents negatively impacted 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.
Fraud is not only about sheer financial losses though, according to the study. While 47% of global fraud victims did experience financial repercussions (including lost savings and stolen bank information), the study also revealed a significant personal toll. 34% of victims reported mental or physical health repercussions, including anxiety, depression and stress. Moreover, 21% faced social repercussions, and 20% experienced physical safety concerns. Many victims reduce their use of online payment systems as well as social media following a fraud incident.
“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.”
Edited by
Alex Passett
