Report: Americans Think E-Commerce Purchases Make Them Vulnerable to Fraud
The holiday shopping season kicked off Thanksgiving weekend with a record-breaking 190 million consumers flocking to stores both in person and online. Yet, according to a new report, more than two in five (41 percent) Americans think online retail purchases make them the most vulnerable to fraud. This concern doesn't seem to be hindering sales though, as the National Retail Federation reported that, on average, shoppers spent $361.90 between Thanksgiving and Cyber Monday, up 16 percent from 2018.
The report found that while 41 percent of Americans believe that companies do not take proper security measures to safeguard their personal information, consumers may actually be putting themselves at greater risk for fraud due to unsafe online shopping habits. Retailers must not only understand how these risky consumer behaviors can have a direct effect on their businesses, but also how they can remind customers that protecting their information is a top priority.
Americans May Be Putting Themselves (and Retailers) at Risk for Fraud
Four in ten (41 percent) Americans who have been a victim of fraud or identity theft became one because their credit card number was stolen or compromised. Despite this, 43 percent of Americans still have their financial information stored on a retailer's website for easier and faster checkout. While this practice certainly makes shopping easier for consumers, the downside is that it provides a potentially large target of sensitive data for hackers, as well as an avenue for those bad actors to make fraudulent purchases on a retailer’s website. If compromised, a retailer’s bottom line and reputation are negatively impacted by consumers losing trust in the brand’s ability to protect their data.
What’s more, more than half (51 percent) of Americans admit to reusing passwords/PINs across multiple accounts, and nearly one in 10 (9 percent) do not update or change their passwords after a company they do business with or have an account with suffers a data breach. While it's not recommended to use the same password across multiple accounts, the reality is that some customers will continue to do this due to the convenience of only having to remember one password. If a consumer’s information is compromised in a previous data breach, and they reuse that same password with a retailer, then the retailer too risks losing consumer trust with its ability to protect them. To combat this, retailers must take data protection and security into their own hands by implementing and maintaining proper cybersecurity controls to protect their customers and their brand.
Help Keep Consumer Information Safe
In addition to implementing and maintaining proper cybersecurity controls over their websites, applications and networks, retail businesses can reassure customers in a multitude of ways that protecting their information is a top priority. One way they can do this is by providing training to employees on how to spot and report signs of fraudulent activity and educate them on how to best respond to situations where a customer’s information has been compromised.
Customers will be put at ease knowing that the retailer they're choosing to do business with takes the time and effort to make sure all employees are trained on how to protect their information. They'll also be relieved to know that the employee that's handling their situation has been trained on how to properly respond and resolve cases of fraud.
As consumers’ online spending increases, it's no surprise they're more vulnerable to fraud. Retailers have the ability to decrease their chances of being the next company named in the news for falling victim to a data breach by prioritizing protecting customer information.
Michael Borromeo is vice president, data protection at Stericycle, the provider of Shred-it information security solutions. He is responsible for Stericycle’s global privacy and data retention programs, covering all business units and operating countries.
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