Consumers put banks in the frame for holiday shopping fraud

holiday shopping

As we head into the peak holiday shopping season, 66 percent of Americans believe they could easily become a victim of fraud, while another 65 percent think they are at a higher risk of having their financial information exposed as a result of their holiday shopping.

A new report from digital risk protection company Terbium Labs also shows that 68 percent would hold their bank at least partly responsible for fraudulent activity, no matter how the compromise occurred.

Even if their bank or card company wasn't the original source of the data breach, 51 percent say they'd blame both the original source of the data compromise, such as a retailer, and the financial institution that issued the payment card. While another 17 percent say they'd hold only their financial institution responsible regardless.

This is a worry for the banking industry as the results show financial institutions stand to lose almost half (45 percent) of their customer base if data is compromised over the holidays. This includes 19 percent of consumers who say they'd leave the bank and close their account following a data breach, and another 26 percent that would only keep their accounts if their financial institution took specific actions to improve security.

Consumers aren't helping their case, however, by failing to practice good security habits. 35 percent plan on using a mix of both debit and credit cards, while 49 percent say that they'll use between two and three cards in total. This common tendency to spread holiday spending across multiple cards creates a much greater volume of cards in circulation -- and therefore more opportunity for cyber criminals to capture payment data from multiple accounts.

Just seven percent of respondents plan on using two-factor authentication when shopping online. Instead, 38 percent say they'll prioritize monitoring their transaction history, even though 14 percent say they get frustrated when purchases that aren’t suspicious get flagged too often.

"Financial institutions are under heavy scrutiny by consumers during the holiday season, and should be taking customer trust and loyalty very seriously," says Emily Wilson, VP of research at Terbium Labs. "Cyber criminals thrive during peak holiday shopping -- the hustle and bustle of transactions and unusual shopping patterns create countless opportunities to capture payment data and attempt fraudulent transactions. Consumers are distracted, and prefer reactive measures to account for fraud, all while holding financial institutions to a high standard in keeping their data safe and their accounts secure. If financial institutions don't take proactive measures to monitor customer data and detect the first sign of exposure, they could face significant consequences in the new year."

When it comes to identity theft, consumers are still most worried about Social Security numbers (23 percent) being compromised. This is just ahead of debit card numbers (22 percent) and credit card numbers (21 percent).

The full report can be found on the Terbium Labs site.

Photo credit: pathdoc / Shutterstock

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