New Feedzai Survey Puts The Blame Game Under Review

Experiencing a data breach is a bad enough situation, but how consumers view the event can be just as damaging. As such, prevention plays a key role in securing consumer confidence, and just more than half of consumers put that responsibility squarely on merchants, new research shows.

The situation for retailers is a bit worse post-occurrence, as 60 percent of respondents to a recent Harris Poll sponsored by fraud-prevention specialist Feedzai who knew about the breaches at such notable retailers as Target and Neiman Marcus put the merchant responsible for preventing future breaches. Comparatively, 13 percent believed responsibility fell on banks, while 5 percent said it fell on  consumers (though the percentage rose to 10 percent of males ages 18 to 34).  Moreover, 20% of females in that age group felt the government bore responsibility, while 13% of all those who were aware of any data breaches felt the government did.

In a recent podcast interview with Market Platform Dynamics CEO Karen Webster, Feedzai CEO Nuno Sebastiao described the company’s system, created originally in Europe, as one that uses a combination of real time, machine-learning fraud-prevention technologies to essentially help the payment ecosystems of networks, banks and retailers.

“Fraud prevention is now a matter of predicting complex consumer behavior based on changing sentiments,” Pedro Bizarro, Feedzai chief data scientist, said in the survey-results announcement. “These findings show that consumers believe it is the merchant’s responsibility, but really it is a collective problem that the industry needs to understand in order to distinguish customers from criminals and keep payment data safe.”

For the research, Harris surveyed 2,047 U.S. adults ages 18 and older in January. The survey for the “2014 Consumer Reaction to Financial Data Breaches Study” was conducted online.

Many respondents found getting their credit or debit card stolen was more aggravating than a number unpleasant activities. In fact, 43% of U.S. adults felt that nothing is more aggravating than theft.

The survey also found  that 20% of Americans believed losing their cell phone is more aggravating than card/debit card data theft, while 20% felt getting the flu was more aggravating, which jumped to 25% for Americans ages 35 to 44.

Consumers took notice of the recent retailer data breaches over the holiday season, and fraud is now top of mind, the research suggests. While the recent breaches happened in physical stores, 52 percent of respondents who were aware of any data breaches still believed shopping in a physical store was safer and more secure than shopping online when using debit or credit cards.

Moreover, 22% of respondents who were aware of any data breach changed their shopping behavior. The highest proportion of those making such a came from those aware of data breaches in the Midwest, with 26% reporting changes, while the lowest proportion from those in the West, with 19% reporting changes in shopping behavior due to recent data breaches.

Nearly 3 in 10 (28 percent) respondents who were aware of any data breach had stopped shopping at the affected retailers. Among those ages 35 to 44, the proportion increased to nearly four in 10 (36 percent).

Cash seems to provide consumers with a feeling of comfort, suggesting use of government currency won’t go away any time soon – especially if breaches continue. While 40 percent of those aware of any data breaches say they started using cash for more of their purchases when shopping, the proportions rose for those ages  18 to 34 (43 percent) and those ages 35 to 44 (45 percent). Among respondents ages 65 and older who were aware of any data breaches, 32% were using more cash.