Consumers don’t trust brands and service providers to protect their identity

More than half of people questioned by Onfido said they fear their identity is available for purchase, while almost half said that online service providers and platforms do not prioritise anti-fraud measures

Posted 25 May 2022 by Christine Horton

More than half (53 percent) of consumers distrust brands or online service providers with protecting their identity.

New research from Onfido shows that 57 percent of people agree they now fear their identity is available for purchase, while almost half (47 percent) said that online service providers and platforms do not prioritise anti-fraud measures.

The emotional cost of fraud

In the survey of 1,000 UK and 1,000 US consumers, Onfido examined 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 percent) of consumers would feel embarrassed as a result, while 45 percent would feel vulnerable afterwards.

This emotional distress is compounded by the perception that fraud is a personal crime. Nearly three-quarters (72 percent) of consumers agree that fraud feels like a personal attack, while over half (55 percent) agree that fraud victims are perceived to be at fault, and almost half (45 percent) said identity fraud is not treated equally to other forms of crime.

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

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 percent 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 percent) 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 percent of consumers would take similar action with businesses in the cryptocurrency sector, while 42 percent would change online gaming or gambling providers, 40 percent with telecommunications providers and 37 percent with healthcare providers.

Re-establishing trust

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 percent 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 percent) or taking a photo of their ID on their smartphone for instant verification (26 percent) 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 percent 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.”