Banks’ inflexible and restrictive processes leave fraud victims frustrated

Following its latest consumer study into banking fraud, Aspect Software found that restrictions imposed by victims’ banks and credit card providers after fraud has occurred are causing frustration and leaving 1 in 10 people without access to any money and relying on friends and family.

The research by Censuswide, commissioned by Aspect, surveyed 500 victims of banking fraud in the last 12 months to April 2017. The study found many consumers felt in the dark when fraudlent activity occured on their banking account, leaving them confused and forced to go for days without access to funds. Almost one in five (19 per cent) respondents say that they were only aware of a fraudulent issue when their card was refused during a transaction, and 63 per cent say that blocking their account card was the next thing to happen after being made aware of the fraud. In almost one in ten times (9 per cent) victims claimed they had no access to money until their replacement card arrived, leading to borrowing in 8 per cent of instances.

According to the research, in 44 per cent of cases monies lost fraudulently were refunded, taking on average 3.7 days on average to reach their accounts. 16 per cent claimed they were refunded “immediately”, with a further 28 per cent receiving a refund within 24 hours. 3 per cent say that it took longer than a week, and 2 per cent claim they never received reimbursement from their provider.

Keiron Dalton, Global Program Senior Director, Aspect Software, commented: “Some providers deploy sophisticated technology to monitor behaviours and flag suspicious activity, often resulting in an immediate block on customers’ access to their money – sometimes temporarily until they can verify the transactions in question with the account holder. At other times as our research reveals, more than a quarter of respondents had to report fraud or suspicious activity to their providers first. Unfortunately, the default seems to be block now, verify and notify later which is causing consumer confusion and frustration. Naturally customers are going to want fraudsters’ access to their accounts stopped at the earliest opportunity, but at the cost of their own freedom.

He continued: “The use of mobiles for banking has made it possible to leverage publically available mobile data to verify users with something as simple as a short, automated call to check things such as SIM Swap, call divert and geo-location. Security need not be taxing, but instead it can be imperceptible to the customer and offer multi-factor authentication at the same time,” he concluded.”

The study found that 42 per cent of those aged 16-44 years old stated that they do feel restricted by their bank or credit card provider by procedures that are in place to protect them from being exposed to fraud. Just 19 per cent of those over the age of 44 felt the same. When asked about whether they thought online or mobile banking was easy and convenient to use, or used the highest possible levels of security, the total result was slightly skewed towards convenience; most people only marginally want convenience over a balance between convenience and security (41 per cent versus 39 per cent), with only 20 per cent choosing the highest possible levels of security.

Keiron concluded: “The BBA calculates that people log into mobile banking apps more than 11 million times a day in Britain alone. Consumers that choose to manage their money via a device, which tends to be Millennials and Generation X, expect flexible, speedy digital banking that’s so easy it has become second nature, so why are we still in the dark ages when it comes to fraud? If mobile can make money management easy, frictionless and convenient, why can’t it for security, verifying identity and identifying attacks before they can succeed.”

Other key findings include:

  • The younger demographic favoured ease of use over security; just 11 per cent of those aged 16 to 24 years old chose security, compared with 38 per cent of those aged over 55 years old. 25 to 34 years olds overwhelmingly chose convenience at 48 per cent
  • 11 per cent of people felt like their provider treated them like a criminal, not the victim. 12% were not believed, and 12% felt the bank was not doing all it could to put their mind at rest
  • In almost half (47 per cent) of fraudulent occurrences, the bank or credit card provider arranged for a replacement card to be sent to the victim or account restrictions lifted securely
  • 11 per cent felt that they struggled to recover monies lost, or get replacement cards

 

*Survey conducted by Censuswide and commissioned by Aspect Software UK. Sample of 500 respondents in the UK 16+ years old, who have experienced at least one incidence of banking fraud in the last 12 months. Research conducted in April 2017.