Can I Trust You? Online Fraud Boom Casts Doubt Over Brands’ Ability To Protect Consumers’ 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 UK 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, 53% of UK consumers agree that they now fear their identity is available for purchase, while almost half (47%) agree that online service providers and platforms do not prioritise anti-fraud measures. As a result, half (50%) of consumers agree that they now distrust brands or online service providers with protecting their identity.

The emotional cost of fraud

In the survey of 1,000 UK 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, one third (33%) of consumers would feel embarrassed as a result, while 46% would feel vulnerable afterwards.

This emotional distress is compounded by the perception that fraud is a personal crime. Seven in ten (70%) UK consumers agree that fraud feels like a personal attack, while over half (56%) agree that fraud victims are often perceived to be at fault, and almost half (44%) agree 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, 68% would not bother reporting fraud to the police, no matter the size of the scam, as just over three in ten of those (32%) believe they would not get their money back while 27% would not be confident that appropriate action would be taken.

There are no second chances

As a result, Brits 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% indicate that it would lead to distrust of the associated business.

This not only means reputational damage but a loss of business. In fact, just over two in five (41%) UK consumers would immediately close their financial services account or switch providers in the banking and finance sector, in the event of fraud. Moreover, 34% of consumers would take similar action with businesses in the cryptocurrency sector, while 40% would change online gaming or gambling providers, 37% with telecommunications providers and 34% 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 84% of Brits indicate that security measures can support this process.

When given a choice, consumers specifically point towards multi-factor authentication such as biometric verification (40%) or taking a photo of their ID on their smartphone for instant verification (24%) 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 64% 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 UK 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.”

Onfido’s study also examines the emotional cost of fraud on 1,000 US consumers. To view the combined US and UK results, and to learn more about how to instil confidence in your ability to verify and protect identities, please visit Onfido’s page here.