India Second In Terms Of Debit Card Frauds

A global fraud study of more than 6,100 consumers across 20 countries revealed that one in four consumers is a victim of card fraud in the last five years. India stands second in terms of debit card fraud rate at 32%, as opposed to 21% in 2012.
Card fraud is comprised of unauthorized activity on three types of payment cards-debit, credit and prepaid. Cardholders experience fraud at very different rates around the globe, and each type of card has unique fraud challenges.
About 41% of respondents in India have experienced card fraud in the past five years, as opposed to 37% in 2012. The study conducted by ACI Worldwide and Aite Group, also highlighted that the highest rate of fraud on prepaid cards is experienced by consumers in India at 18%.
According to the study, UAE tops the list of countries with highest rate of fraud overall, followed by China, India and the US.
The study called ‘Global Consumers: Losing Confidence in the Battle Against Fraud’, stated that there has been a significant rise in the number of fraudulent activities in the financial services space. It is observed that more than 1 in 10 have experienced fraud multiple times during the past five years.
“Given this latest data, financial institutions have their work cut out for them, both in terms of educational and preventative measures,” said Shirley Inscoe, senior analyst, Aite Group. “Consumers lack confidence in their bank’s ability to protect them from fraud, so banks must remain vigilant in their fraud migration efforts or face increased customer attrition.”
About 28% of Indian consumers said that their financial institution sent a new debit, credit, or prepaid card to them only once during the past year because of a data breach or fraudulent activity.
With 1,367 confirmed data breaches in 2013 alone, the security of the financial services value chain is top-of-mind. As organized fraud rings relentlessly develop new methods of stealing funds and identities, consumers are increasingly losing confidence that there is anything that can be done to reverse this downward spiral.
“Consumers are increasingly concerned about fraud, and are losing confidence on a variety of levels,” said Subhashish Bose, senior fraud consultant, Payments Risk Management Solutions, ACI Worldwide. “They are unsure that their financial institutions can protect them against fraud; they use replacement cards less often due to a loss of confidence in the card or card issuer, after experiencing fraud; and post-fraud, they often change providers or their cards go to back of wallet. This has immediate and long-term implications on customer loyalty, revenue and fee income.”
The survey stated that 34% of Indian consumers said that they are ‘somewhat unhappy ‘with the treatment from the financial institution while experiencing a card fraud, due to which 58% of Indian consumers changed their financial institutions.
Consumers in India have the most confidence that their financial institution can protect them against fraud-43% feel absolute confidence in such protection, and an additional 46% feel the financial institution is doing all it can to protect them.
ACI Worldwide conducted online quantitative market research via a March 2014 survey of 6,159 consumers; approximately 300 consumers, divided equally between men and women, participated in each of the 20 countries. Of the total, 6,041 own one or more type of payment card (i.e., credit card, debit card, prepaid card).
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Courtesy: Business Standard