While most of the headlines surrounding payment card fraud and data breaches seem to put the spotlight on large merchants, fraud is affecting small- and medium-sized businesses (SMBs) at a significant rate as well.
Of course, fraud can take many forms. Small businesses often contend with employee fraud in the form of everything from property theft to embezzlement. Smart hiring practices and vigilant inventory monitoring may help identify and counteract some of the negative effects of employee fraud.
Fraud committed via cyber-attacks is a growing threat for businesses of all sizes, with SMBs being a leading target. According to IBM, SMBs are the target of 62% of all cyber-attacks, which amounts to approximately 4,000 per day. While some businesses might consider themselves too small for cyber security, or might not have the budget to invest in advanced fraud prevention tools, these statistics prove that cyber security is imperative for businesses of all sizes – especially SMBs. Consider:
- Despite the high percentage of fraud that targets SMBs, 66% of SMBs say they are not concerned about cyber threats
- The majority of small businesses (58%) are concerned about cyber-attacks
- However, more than half (51%) are not allocating any budget to help thwart these attacks
It’s clear that fraud doesn’t discriminate based on the type, or size, of a business. And when these attacks occur, the everyday consumers that shop at these merchants are affected. From dealing with fraudulent charges on their credit card statements to vigilantly monitoring personal credit reports, fraud is a nuisance that more and more consumers are learning to cope with in their daily lives.
Vantiv and Socratic Technologies teamed up to gather new insight into how real-life people are dealing with the consequences of fraud. The survey explores everything from the percentage of respondents that have been victims, to how they’re trying to thwart fraud on their own. Here’s what the survey of 500 consumers discovered.
Number 1: Almost one-quarter of consumers have personal experience with data breaches that compromised their payment card information.
In the survey, approximately 24% of consumers report direct personal experience with data breaches that compromised their payment card information. The survey also examines the generations that have the most, and least, personal experience with payment card fraud. The survey finds that Gen Xers have the most experience (26%) and Retirees have the least experience (20%).
Number 2: Consumers have a pessimistic outlook on data breaches.
In the survey, 29% of respondents say that their card information will “probably” or “definitely” be stolen through a data breach in the next two to three years. And consumers that have already fallen victim to data breaches are more than twice as likely to expect another attack (50% of victims versus 22% of non-victims). Younger consumers (Millennials and Gen Xers) are more likely than Baby Boomers and Retirees to expect a data breach in the next two to three years.
Number 3: If a data breach were to occur, survey respondents indicate that their first course of action would be to contact their payment card issuer.
At 69%, the vast majority of consumers would take the action of contacting their card issuer if a data breach were to occur. The second most popular reaction would be to change passwords on websites where card information is stored at 60%. The third most popular action would be checking personal credit reports at 50%. There is also a clear indication that most consumers would take some type of action in this situation, with only 7% reporting that they wouldn’t take any action at all.
Number 4: Recent data breaches are on consumers’ minds.
In the survey, approximately 50% of consumers indicate that they are aware of a recent data breach (a breach that’s occurred within the past 6 months). Retirees report having the most awareness at 48%. Gen Xers are least likely to be aware of a recent data breach, with only 41% reporting.
Number 5: Who do consumers view as being the chief victims of recent data breaches? The majority say mass merchants.
When it comes to awareness of data breaches across different types of merchants, 51% of survey participants say they are aware of data breaches reported by large mass merchants. Department stores come in second at 23%.
Number 6: Just because a retailer or restaurant has been the victim of a data breach doesn’t mean that consumers will stop patronizing them.
For survey participants that identify as victims of data breaches, 61% say they “probably” or “definitely” would continue patronizing a retailer or restaurant that was attacked. For survey participants that do NOT identify as victims of data breaches, only 50% report the same.
Number 7: In the event of a data breach, consumers most often recall merchants notifying them of the breach by mail.
Survey respondents indicate that mailed letters are the primary action that merchants take after a data breach at 39%. The next most popular actions are offering credit and identity theft monitoring (37%) and email notifications (31%).
Number 8: If their personal information is compromised during a data breach, consumers want to be notified and offered credit and identity theft monitoring.
An email notification is what survey participants most often expect at 75%. This is followed by notification via hard copy mailed letters (60%) and credit and identify theft monitoring (60%). Across generations, Millennials have the highest expectations for personal notifications and credit and identify theft monitoring – 83% expect email notifications and 68% are looking for credit and identity theft monitoring. Compare this to Retirees, 63% of whom expect email notifications and 52% of whom expect credit and identity theft monitoring.
Number 9: Regularly monitoring payment card transactions online is the number one line of defense for consumers.
Survey participants indicate that they are most likely to protect themselves against fraud by keeping a close eye on their payment card transactions online (63%). Shredding mail that contains personal information is the second most popular tactic (51%), followed by never submitting card information online over a website without SSL protection (50%).
Number 10: Survey respondents believe that card issuers have the greatest responsibility to protect consumers and their payment card accounts against fraudulent charges.
But they also recognize their own personal responsibility and the responsibility of merchants as well. Here’s the breakdown:
- Credit card issuers – 75%
- Individual cardholders – 67%
- Merchants – 64%
Find more statistics about fraud.
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