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Taking Charge of Payment Fraud this Holiday Season

It’s not surprising that consumers are particularly concerned about payment card fraud during the holiday season. On top of worrying about the bills they’re racking up this month, the last thing consumers need are unpleasant surprises on their credit card and bank statements.

The holiday shopping season accounts for roughly 20 percent of all consumer spending in the US, according to the National Retail Federation. Total consumer spending for Christmas and Hanukah is nearly triple the spending on all other holidays combined (e.g., Mother’s Day, Valentine’s Day, Halloween).

This prompted us to survey consumers in the US, UK and Canada about payment card fraud with the holidays approaching. We found a large majority of consumers are concerned enough about fraudulent use of their credit cards and debit cards that they want to take a more proactive role in their own security.

In the US, 70 percent of respondents said they were concerned about fraudulent use of their payment cards. In Canada, 75 percent of respondents were concerned about fraud and in the UK, 66 percent of those polled expressed concern about fraud.

Survey respondents said they were interested in tools they could use to manage their own payment security. In all three countries, more than 50 percent of consumers said they wanted to control the types of transactions for which their cards could be used (e.g., in-store, online, mail order), and the maximum dollar amount for allowable transactions.

Other types of do-it-yourself controls of interest to many survey respondents included being able to manage and adjust geographic controls, such as the states and countries where their cards could be used, and managing the merchant categories (e.g., department stores, restaurants, gas stations) where their cards could be used.

Interestingly, US consumers were significantly more interested in real-time alerts than consumers in the other two countries. Among US respondents, 63 percent said they would use a service that sends email or text messages when suspicious activity is observed on their payment cards. In Canada, 51 percent of respondents said they would use such a service, while 46 percent of respondents in the UK were interested in that type of service.

In all three countries, consumers were concerned about more than simply financial losses due to fraud. Among non-financial concerns, the time required to fix the problems created by fraud was the biggest worry. This was the top concern for 68 percent of respondents in the US, 60 percent in Canada and 51 percent in the UK.

We conducted our survey online during October. We had 1,265 responses.

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