Can I trust you? Online fraud boom leads US & UK consumers to doubt brands’ ability to protect their digital identities

Research from Onfido demonstrates the emotional cost of fraud is a breakdown of trust between consumers and brands 

Onfido, the leading global digital identity verification and authentication provider, today announces the results of a study revealing the emotional impact of fraud on consumers and how this is fostering distrust of brands responsible for keeping customers’ online identities safe.

With the rate of identity fraud rocketing 44% since 2019 as fraudsters follow consumers online, 57% agree they now fear their identity is available for purchase, while almost half (47%) said that online service providers and platforms do not prioritize anti-fraud measures. As a result, more than half (53%) of consumers distrust brands or online service providers with protecting their identity. 

The emotional cost of fraud
In the survey of 1,000 UK and 1,000 US consumers, Onfido examined the impact of fraud through a human lens to expose how the emotional impact can lead to a breakdown of trust between businesses and consumers.

With many claiming to be ‘digitally savvy’ or able to spot fraud online, those falling victim to fraud often experience a heightened emotional reaction. In fact, almost one third (32%) of consumers would feel embarrassed as a result, while 45% would feel vulnerable afterwards.
This emotional distress is compounded by the perception that fraud is a personal crime. Nearly three-quarters (72%) of consumers agree that fraud feels like a personal attack, while over half (55%) agree that fraud victims are perceived to be at fault, and almost half (45%) said identity fraud is not treated equally to other forms of crime.

Despite the clear emotional cost, consumers lack belief in the fraud support system. For example, 61% would not bother reporting fraud to the police, no matter the size of the scam, as just over three in ten of those (31%) believe they would not get their money back while 29% would not be confident that appropriate action would be taken.

There are no second chances
As a result, consumers are taking charge of what they can control, which is where they spend their time and money. The survey found there are no second chances for brands when it comes to fraud, as 68% of consumers indicate that it would lead to distrust of the associated business.

This not only means reputational damage but a loss of business. In fact, almost half (42%) of consumers would immediately close their financial services account or switch providers in the banking and finance sector in the event of fraud. Similarly, 38% of consumers would take similar action with businesses in the cryptocurrency sector, while 42% would change online gaming or gambling providers, 40% with telecommunications providers and 37% with healthcare providers.

Re-establishing trust in a digital-first world
Brands have an opportunity to regain consumer trust depending on the security measures used to protect their identities online. In fact, as many as 85% of consumers indicate that security measures can support this process.

When given a choice, consumers specifically point towards multi-factor authentication such as biometric verification (43%) or taking a photo of their ID on their smartphone for instant verification (26%) as measures that would increase their trust in a company with their online identities. Consumers also indicate that these security measures could support trust on social media platforms and prevent misinformation, abuse and hate speech, as 65% agree they would increase their use of online sites if there were secure identity verification solutions in place to prevent such things.

Commenting on the research, Mike Tuchen, CEO of Onfido, said:

“Our research tells us that consumers feel the emotional cost of fraud. This emotional cost is as important as the financial impact when it comes to trust in brands. Businesses have a duty to protect their customers and make their digital services and products easy and simple to access online.

“With fraudsters increasingly moving online and deploying increasingly sophisticated tactics, brand trust is eroding due to what many believe to be a victimless crime. It’s up to brands to rebuild trust with effective security measures - like biometric verification. With no second chances on offer, that’s how they will retain custom and protect their reputation in an increasingly digital world.”

Research Methodology: 
This study of 1,000 nationally representative respondents in the UK & 1,000 nationally representative respondents in the US was commissioned by Onfido in partnership with Censuswide, between 21 April 2022 and 25 April 2022. Censuswide abides by and employs members of the Market Research Society which is based on the ESOMAR principles.

Previous Article
Fintech Nexus: what’s happening at the Onfido booth?
Fintech Nexus: what’s happening at the Onfido booth?

Onfido is at Fintech Nexus talking all things digital identity, fraud, AI and regulation. Discover everythi...

Next Article
What are PEPs and sanctions checks?
What are PEPs and sanctions checks?

Learn why PEPs and sanctions designations are necessary, what institutions can decide on the exact definiti...