A stark warning has been issued to British holiday shoppers as new research reveals that one in four credit card users have been victims of fraudulent activity in the last twelve months.
The comprehensive study by research firm JD Power, which surveyed 40,197 participants, paints a sobering picture of the threats consumers face as the festive spending period gets underway. The findings also indicate that nearly three out of ten banking customers with a checking, savings, or debit account have encountered some level of fraud.
Gen Z Bears the Brunt of Banking and Credit Card Fraud
The data highlights that Generation Z is the most vulnerable demographic, with a startling 43% having experienced banking fraud and 41% falling prey to credit card fraud.
JD Power suggests that this younger generation's high fraud rates could be linked to their increased reliance on debit cards and person-to-person payment apps like Venmo and CashApp. A concerningly lax attitude towards account security from both financial institutions and consumers of all ages is also believed to be a contributing factor to these alarming figures.
For instance, the study found that in the past 90 days, nearly 30% of credit card customers failed to use security measures to protect their accounts. Compounding the issue, half of all bank customers reported not receiving any prompt from their bank or card issuer to implement such safety protocols.
How to Fortify Your Finances This Festive Season
With the holiday shopping frenzy in full swing, experts recommend several straightforward steps to safeguard your financial information.
Use Virtual Card Numbers
Peter Horadan, CEO of identity verification firm Vouched, advises consumers to take advantage of virtual card numbers if their credit card provider offers them. He explained to The Independent that this provides a unique card number for every merchant. Once used, that number becomes useless elsewhere, effectively neutralising its value if stolen by fraudsters.
Leverage Digital Wallets
Horadan also champions the use of digital wallets such as Google Wallet, Apple Wallet, and Samsung Wallet. These platforms allow for payments without disclosing your actual card number to the merchant, adding a vital layer of security.
Activate Real-Time Alerts
Another crucial defensive measure is to set up real-time alerts through your bank or card issuer, recommends Terri Luttrell, Compliance and Engagement Director at banking software firm Abrigo. These notifications for large purchases enable you to spot and address any unauthorised transactions immediately.
Immediate Action is Critical
Despite all precautions, fraud can still occur. In such an event, Luttrell stresses that speed is of the essence. Report any unauthorised transaction as soon as you discover it. Your card issuer can then freeze or cancel the compromised card, issue a replacement, and begin the formal fraud investigation process.
As Jennifer White, JD Power's Senior Director for Banking and Payment Intelligence, summarised, financial institutions invest billions in cybersecurity, but customers must also play their part by utilising the protective tools available to them.
