Consumers Rank Social Networks Better Than Online Businesses for Ability to Protect Personal Information and Stop Online Fraud
Posted May 11, 2011
Based on Consumer Perception Around Successful Online Fraud Prevention Practices, Online Businesses Considered Worst; Banking Industry Named Best
LOS ALTOS, CA – May 12, 2011 – ThreatMetrix™, the fastest growing provider of cloud-based fraud prevention solutions that do not require personally identifiable information (PII), today announced that a joint study with the Ponemon Institute reveals consumer sentiment surrounding industry ability to safeguard their personal information online. Results across four industries showed consumers are most confident in banks, followed by credit cards and payment processors, and social networks. Consumers believe online businesses are the worst at protecting personal information.
The report found that 88% percent of consumers would not do business with banks or credit card and online payment processors if they had doubts about their security measures. Seventy-seven percent said the same for online businesses, and 56% for social networks.
“It’s logical that consumers should have the most confidence in the banking industry’s ability to protect their information online, as banks have a responsibility to protect their customers’ funds,” said Reed Taussig, president and CEO, ThreatMetrix. “Social networks, however, surprisingly have a higher consumer confidence ranking than online businesses in regards to protecting personal information. That represents a problem for the e-commerce industry, which relies on secure online transactions as the foundation of their business model.”
The survey found that the perception of a company’s ability to prevent fraud weighs heavily in a consumer’s online decisions. Three in four consumers said they would not do business with an online merchant if they had doubts about the site’s security measures. Eighty-eight percent said the same of banks or credit card and online payment processors, and 56% for social networks.
“Banks, online businesses, social networks and payment processors are all targets from fraudsters who phish their accounts for emails and passwords,” said Taussig. “Yet when you bring e-commerce transactions into the picture, consumers are still very wary about the security of that data. Banks understand the importance of communicating these fraud prevention measures, which online businesses must also do. It’s the first step to increase that level of confidence to the point where a consumer is willing to complete a transaction.”
More Aggressive Fraud Prevention Strategies
Eighty-five percent of survey respondents said online merchants, banks, social networks and payment processors should be more aggressive in preventing fraudsters from stealing consumers’ information. Similarly, 80% believe these industries should leverage technology to improve authentication of consumers.
Yet not only are consumers indicating these industries need to take extra steps to combat online fraud, but 81% said they would be more willing to use a bank, credit card company or payment processor if they were notified that the organization was taking additional measures.
For the full results of the study, see the report, “Consumers’ Reaction to Online Fraud.”
The Ponemon Institute© is dedicated to advancing responsible information and privacy management practices in business and government. To achieve this objective, the Institute conducts independent research, educates leaders from the private and public sectors and verifies the privacy and data protection practices of organizations in a variety of industries. For more information, visit www.ponemon.org.
ThreatMetrix®, The Digital Identity Company®, is the market-leading cloud solution for authenticating digital personas and transactions on the Internet. Verifying more than 20 billion annual transactions supporting 30,000 websites and 4,000 customers globally through the ThreatMetrix Digital Identity Network®, ThreatMetrix secures businesses and end users against account takeover, payment fraud and fraudulent account registrations resulting from malware and data breaches. Key benefits include an improved customer experience, reduced friction, revenue gain and lower fraud and operational costs. The ThreatMetrix solution is deployed across a variety of industries, including financial services, e-commerce, payments and lending, media, government and insurance.