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Your mobile device: weapon against or tool to aid fraud?

This morning, I was getting ready for work when I heard my mobile phone buzz in the kitchen. It was 6:45am. “Who could be sending me a text this early?” I thought.

When I grabbed my phone, I realized it was a mobile alert from my credit card company informing me of a card-not-present transaction that took place on my credit card (a pre-established monthly authorization).  I went back to my morning routine with a sense of relief after checking it out.

For some time now, I’ve been using the mobile alerting capabilities offered by my bank and card issuers.  The reassurance from knowing that I’ll be notified via text message of typical and not-so-typical transactions puts my mind at ease and gives me a sense of playing a part in the fraud prevention game.  And it looks like others globally are willing to put some “skin in the game” when it comes to the fight against fraud.

According to the ACI Worldwide global consumer fraud survey data reported in the recent Aite Group research report, Global Consumers: Concerned and Willing to Engage in the Battle Against Fraud:

  • More than three quarters (77%) of global consumers are “very interested” in being contacted about suspicious activity on their cards or accounts via a phone call, e-mail or text message.
  • And nearly three quarters (73%) of global consumers prefer that their bank not post transactions to their card until they respond to a fraud alert.   

These numbers tell me that the consumer thinks about the impact of fraud and is willing to partner with their bank or issuer when it comes to protecting their information and money.

The flip side of the coin

The survey also explored consumer adoption of mobile wallets – typically associated as an app of sorts that contains banking, payment and/or customer loyalty information like rewards programs. With a proliferation of banks and retailers offering mobile wallets, adoption rates vary widely by geography.  According to the survey, mobile wallet adoption rates top out at 72% and 44% in China and Russia respectively, however more than a third of respondents in China (34%) and Russia (43%) don’t have confidence in the protocols invoked to protect account information on a mobile device. When thinking about those contrasting data points, do those who maintain banking and/or payment data in their mobile devices do so for the sake of convenience regardless of the potential security implications? As these countries exhibit high mobile growth rates, one might assume so.

Conversely, respondents from Canada have the lowest mobile wallet adoption rates at 4% with Germany, the UK and the US tied for next at 6%. While they aren’t necessarily embracing mobile wallets, consumer trust in the banks’ ability to protect personal data on the mobile device in these countries is mixed.   Canadians have lowered their complete trust from 55% in 2012 to 45% in 2014, while trust has grown in the US from 32% to 44%, the UK from 25% to 44% and Germany 24% to 37%.  It’s worth noting that the US was the only country where 100% of the consumer respondents think data on mobile devices is “somewhat secure”.  All other 19 countries in the survey have some number of consumers who were either unsure or did not feel mobile devices were secure.

Consumer perception of fraud risks varied greatly as well.  “Using my phone or tablet to shop and pay bills” ranked on the lower end of the risk spectrum at only 5% while “theft by a computer hacker” presented the highest fraud risk at 31%.   I guess consumers don’t see a correlation between hackers and malware and browsers and apps on a phone.  While not a pervasive fraud issue today, the mobile channel is still ripe for fraudsters and there are various ways to get into your handheld computers, eh, I mean mobile devices. And given the amount of personal and financial data contained on a device today, why wouldn’t they be a target?

Maybe it’s time to start looking into fraud alerting capabilities at your bank or issuer.