With new studies confirming rising card fraud and declining card use by fraud victims, eConsumerServices advises banks and merchants to engage in advanced fraud prevention and proactive communication to allay consumers’ fears.
(Tampa Bay, FL) September 19, 2016 – A new report reveals that nearly half of U.S. consumers have experienced card fraud,(1) while another survey found that 56% of fraud victims changed their card use or shopping behavior after a fraudulent charge.(2) eConsumerServices, a dispute mediation firm, maintains that card issuers and merchants must be proactive to avoid losing business in cases of credit card fraud; so CEO Gary Cardone counsels banks and retailers on steps they can take to retain consumers’ trust.
According to the Card Fraud Control Benchmark Study, card-not-present (CNP) fraud increased 12% in the first quarter of 2016 and now represents the largest category of fraudulent activity.(3) Meanwhile, the 2016 Global Consumer Card Fraud study determined that 30% of consumers worldwide—and fully 47% of U.S. consumers—experienced card fraud within the past five years.(1) Globally, 17% of consumers experienced multiple cases of fraud, and 40% use their compromised account less frequently.(1) Another recent study surveyed consumers about their shopping habits following a fraudulent charge, and found that 15% closed their account, 14% changed online retailers, 12% shopped less online, 12% used their replacement card less and 3% did not use their replacement card at all.(2)
“While consumers typically have zero liability for fraudulent charges, the study findings suggest those who are affected by fraud often lose faith in the ability of their card provider or merchant to protect them,” noted Cardone. “Even though consumers may not be financially responsible for fraudulent charges, they still experience the hassle and anxiety of dealing with fraud and waiting for their case to be resolved. Many don’t how the fraud occurred or who perpetrated it, which can lead them to worry about further fraudulent charges or identity theft.”
Cardone warns that if financial institutions and merchants are not proactive in their efforts to allay customers’ fears and regain their trust, consumers’ declining card use, transition away from online shopping and/or switch to competitors could steadily erode their business as CNP fraud continues to grow. To prevent these consequences, Cardone recommends the following measures:
Invest in Advanced Fraud Prevention: The CNP Fraud Consumer Impact survey found that 78% of online shoppers want more protection for their payment card data when shopping online.(2) Cardone urges issuers and eCommerce merchants to implement multi-layered fraud solutions, which result in fewer successful fraud attempts than static, single-layer solutions.(4) She advocates for using biometrics—such as fingerprint verification, voice recognition or facial recognition—and/or dynamic security codes to minimize the risk of criminal fraud.
Maintain Open and Ongoing Communication: Cardone advises issuers and retailers to maintain an ongoing dialog with fraud victims to assuage their fears. “It’s not enough to inform customers of fraudulent charges and then send a brief follow-up when the case is resolved,” she explained. “They’re likely to be feeling confused, anxious and violated; they want to know how the fraud happened, and they want reassurances that it won’t happen again. To rebuild those customer relationships, it’s important to show empathy, share information, keep the lines of communication open and explain how you intend to prevent fraud in the future.”
Provide Consumer Education and Tools: While there are many steps banks and merchants can take to protect their customers, fraud often results from consumers’ careless or risky behaviors; so Cardone suggests arming them with information on how to protect themselves. She also encourages card providers and retailers to work directly with fraud victims to ensure they are aware of the tools and options available to them, such as text alerts for new charges or opting in for multi-factor authentication of online transactions.
“To improve customer retention and loyalty, it’s vital to empower fraud victims with knowledge and a sense of control,” asserted Cardone. “Provide the assurances they seek and remind them that in the battle against fraud, you’re in it together.”
Cardone’s company, eConsumerServices, is dedicated to providing consumer education and advocacy. Online shoppers who wish to dispute a purchase, secure a refund or identify an unrecognized charge can obtain faster resolution and better outcomes by contacting eConsumerServices for assistance. The company’s dispute mediation services are free for purchases made from an eConsumerServices-endorsed merchant; other cases may incur a nominal $2 charge if they take longer than 24 hours to resolve. For more information on eConsumerServices and its transaction mediation services, visit www.econsumerservices.com.
About Global Risk Technologies and eConsumerServices:
eConsumerServices is a division of Global Risk Technologies, a leading provider of dynamic risk management solutions for the international payment industry. With a range of services targeted to merchants, banks and consumers, Global Risk Technologies manages over 200 million transactions worldwide each month and has offices in Europe and the United States. eConsumerServices mediates credit card transaction disputes between consumers and merchants. The firm helps consumers quickly resolve customer service issues and secure a refund or replacement with minimal time and effort, and at little to no cost. Merchants, issuing banks and credit card companies also benefit from eConsumerServices’ dispute mediation expertise by avoiding costly chargebacks and freeing up internal resources. To learn more, visit www.econsumerservices.com.
About Gary Cardone:
Gary Cardone is the co-founder and CEO of international dispute mediation firm eConsumerServices and a managing partner at Global Risk Technologies. His expertise in global trade and finance builds on 25 years of experience in commodities trading, with leadership roles at multinational corporations and a preeminent private equity firm. Spotting strong parallels between industry commoditization and the burgeoning Internet economy, Cardone and his partners set out to develop dynamic risk management solutions for the payment processing industry. Today, those innovations are revolutionizing the way consumers, merchants, banks and credit card issuers transact business online.
1. ACI Worldwide and Aite Group. 2016 Global Consumer Card Fraud: Where Card Fraud Is Coming From; infographic/summary and full report; July 2016. aciworldwide.com/fraud-survey/results
2. Tender Armor. CNP Fraud Consumer Impact: Anxiety That Reduces Credit and Debit Card Usage; April 6, 2016. cvvplus.com/wp-content/uploads/2016/04/CNP-Fraud-Consumer-Impact-Study.pdf
3. Auriemma Consulting Group. “Counterfeit Credit Card Fraud Reaches Lowest Level Since 2013; Other Fraud Types Increase…”; press release issued July 7, 2016. acg.net/counterfeit-credit-card-fraud-reaches-lowest-level-since-2013-other-fraud-types-increase-says-auriemma-consulting-group/
4. LexisNexis. 2016 LexisNexis True Cost of Fraud Study; May 2016. lexisnexis.com/risk/insights/true-cost-fraud.aspx
Karla Jo Helms
Phone: 888-202-4614 ext. 802