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The high cost of fraud for people and brands ... and what to do about it

By: Brandpoint

December 05, 2024 at 09:01 AM EST

(BPT) - Every day on the news, we hear about another data breach. Ticketmaster recently reported that 560 million customers had their data stolen - names, addresses, email, payment information, etc. AT&T noted that 73 million records were hacked, but their breach also included Social Security numbers. Early in the fall of this year, a hacking group claimed to have stolen 2.7 billion personal records, including Social Security numbers, and sold the information on the dark web. That number is mind-boggling.

The high cost of fraud

Data stolen and used by bad actors is a financial nightmare. But it's not only that. According to the 2024 Trust Index Report by customer identity and engagement solutions provider Telesign, 47% of global fraud victims experienced financial repercussions, including lost savings and stolen bank information, but they also suffered emotionally. The study found that 34% of victims experienced anxiety, depression and stress. Additionally, 21% faced social repercussions, and 20% experienced physical safety concerns.

Nearly half of all fraud victims (49%) considered the experience life-altering or very impactful. It changed their use of social media, payment services and e-commerce, and it also changed their view of the hacked brands.

Some 64% of global consumers report that fraud incidents negatively impact their perception of the brand responsible for the breach. Many sever ties completely with the brand, but even more damaging, they often take their grievances to social media and discourage friends and family from engaging with it.

What people and brands can do

A straightforward first step everyone can take immediately is to freeze their credit. This doesn't mean you can't use your credit cards or lines of credit, but it does mean no new credit can be taken out in your name. It's simply a matter of contacting the three credit bureaus and filling out an online form. In a few minutes, it's locked down. When you want or need to get a car loan, mortgage or new credit card, unfreezing is just as easy.

Another step you can take is to avoid engaging with brands that don't take digital identity protection seriously.

According to the Telesign study, nearly everyone (92%) believes that the companies they engage with are the first line of defense and that brands are responsible for protecting digital privacy.

Christophe Van De Weyer, CEO of Telesign, summed it up. "Companies that neglect to safeguard their customers' digital identities are putting more than just data at risk - they're jeopardizing their reputation, customer trust and future growth," he said. "In today's landscape, there's no justification for not implementing stronger security measures like multi-factor authentication, especially since most consumers are willing to embrace additional steps to prevent fraud and feel more secure."

Multi-factor authentication is one example of an additional step. Receiving a security code or going through a few clicks to ensure you are who you say you are is worth it compared to the repercussions of fraud.

The Telesign study also found that an overwhelming 80% of global consumers believe that security measures such as multi-factor authentication are necessary to protect against fraud.

The 2024 Trust Index underscores the urgent need for businesses, governments and individuals to prioritize trust and security in the digital world. Telesign connects, protects and defends companies and customers and the digital interactions between them. Harnessing intelligence from more than 2,200 digital identity signals, Telesign's AI models empower companies to transact with their customers free of fear, enabling the promise of the digital economy. Telesign helps its customers prevent the transmission of 30+ million fraudulent messages each month and protects 1+ billion accounts from takeovers yearly.

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The high cost of fraud for people and brands ... and what to do about it

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