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Alarming Brazilian card fraud trends & outlandish risky behavior

Alarming Brazilian Card Fraud Trends & Outlandish Risky Behavior

In a recent report “Global Consumers: Losing Confidence In The Battle Against Fraud,” it was found that 30% of consumers have experienced card fraud in the past five years. Against a backdrop of 2,260 confirmed data breaches in 2015 and over 4 billion records stolen since in 2013, consumers are losing faith in the ability of providers to protect them.

With the 2016 Rio Games starting soon, we took a closer look at the responses from Brazilian consumers. The high-level takeaway is that the Brazilian payments market has significant room for improvement in light of fraud increases.

  • Of all cardholders—debit, credit, and prepaid—49% have experienced card fraud in the past five years, a significant portion of survey respondents. This number was 30% in 2014, highlighting a growing fraud problem.
  • In 2016, 13% of debit and credit card holders cite having experienced fraud multiple times during the past five years, compared to 16% in 2014.
  • After experiencing fraud, 42% of consumers use the replacement card less, at least in some situations, than they did previously. This ‘back of wallet’ behavior is lost revenue for the card issuer. This number was 47% in 2014, indicating that consumers are used to replacing their cards, and breaches are becoming an unpleasant, but common part of a banking relationship.
  • Consumers dissatisfied with how they are treated by their financial institution after experiencing fraud sometimes change providers, resulting in an attrition rate of 18%. This highlights the importance of after-care following a fraud experience.
  • 14% of Brazilian consumers lack confidence that their financial institution can protect them against fraud. This has improved from 22% in 2014, highlighting the “normality” of fraud in everyday life, and that consumers are recognizing the efforts of banks to protect them.
  • 62% of Brazilian consumers exhibit at least one risky behavior, which puts them at higher risk of financial fraud. Education about risky behaviors and what consumers can do can help reduce fraud rates (how to help them help themselves) is sorely needed.

Brasil

Global

Experienced fraud in the last five years

49%

30%

Consumers who use their replacement card less

42%

40%

Consumers who left their FI after a fraud event

18%

20%

Consumers who lack confidence in the FI to protect them against fraud

14%

14%

Consumers who engage in risky behavior

62%

54%

The data tells us a story of higher fraud rates in Brazil with consumers who are more likely to engage in risky behavior – a vicious cycle that will result in even higher fraud rates. The in-depth report shows that consumers in Brazil have growing concerns about fraud. This has immediate and long-term impacts on the customer experience and loyalty as well as revenue streams for banks, card issuers and merchants.