Portals and Rails

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Portals and Rails, a blog sponsored by the Retail Payments Risk Forum of the Federal Reserve Bank of Atlanta, is intended to foster dialogue on emerging risks in retail payment systems and enhance collaborative efforts to improve risk detection and mitigation. We encourage your active participation in Portals and Rails and look forward to collaborating with you.

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June 23, 2014


Do Consumers REALLY Care about Payments Privacy and Security?

Consumer research studies have consistently shown that a top obstacle to adopting new payment technologies such as mobile payments is consumers' concern over the privacy and security protections of the technology. Could it be that consumers are indeed concerned but believe that the responsibility for ensuring their privacy and security falls to others? A May 2014 research study by idRADAR revealed the conundrum that risk managers often face: they know that consumers are concerned with security, but they also know they are not active in protecting themselves by adopting strong practices to safeguard their online privacy and security.

The survey asked respondents if they had taken any actions after hearing of the Target breach to protect their privacy or to prevent credit/debit card fraudulent activity. A surprising 79 percent admitted they had done nothing. Despite the scope of the Target data breach, only 4 percent of the respondents indicated that they had signed up for the credit and identity monitoring service that retailers who had been affected offered at no charge (see the chart).

Consumers Post Breach Actions

In response to another question, this one asking about the frequency at which they changed their passwords, more than half (58 percent) admitted that they changed their personal e-mail or online passwords only when forced or prompted to do so. Fewer than 10 percent changed it monthly.

When we compare the results of this study with other consumer attitudinal studies, it becomes clear that the ability to get consumers to actually adopt strong security practices remains a major challenge. At "Portals and Rails, we will continue to stress the importance of efforts to educate consumers, and we ask that you join us in this effort.

Photo of Deborah Shaw

June 23, 2014 in consumer fraud, consumer protection, data security, identity theft, privacy | Permalink

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Comments

Consumers have been hearing "the horror stories around the campfire" for so long, they have come to believe that if the "boogieman" is going to get you, there is nothing you can do about it. However, this is just not true. The FSO industry needs to promote consumer education efforts to update the public: we are each provided options every day that can serve to reduce our exposure to the fraud/ID theft boogieman - at FraudAvengers.org we call it "anti-fraud activism". Once aware, consumers will find themselves liberated to make choices based on their own risk tolerance about: how they make and receive payments; how they use their communication devices; the places in which they voluntarily place their personal information; ways and frequency of monitoring their financial, medical and other personal records; who and how they do business with people they have never met and/or do not know; etc. By ensuring we always include the "lessons learned" after we tell our horror stories, we serve to educate the public and inform them of protective actions they can take in their own defense. Crime collar criminals are always looking for victims: by reducing one's visibility to them and by proactively knowing what to watch-out for, consumers can greatly reduce the likelihood of becoming victims.

Posted by: Jodi Pratt | June 23, 2014 at 03:19 PM

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