Scams can damage business reputation
Steve O’Malley, Chief Revenue Officer at Callsign, reports on the results of its annual scams research, revealing the true extent of the damage to business reputation that scams can cause.
The research surveyed 8,000 consumers in nine countries, including 1,000 in the UK. The report found that 84% of UK consumers say their trust in a company has changed due to a scam issue; 78% say their bank should be responsible for protecting them against fraud and 44% of organisations have difficulty in measuring and understanding how to effectively combat fraud and scams.
The research also found a 40% increase in UK consumers who had received a scam message in 2022 compared to 2021. For 23% of consumers who had received a scam message, this was enough for them to stop using the company or service associated with the message.
Steve O’Malley, Chief Revenue Officer, Callsign
Additionally, the research revealed that over a third (38%) of UK respondents have lost money to scams, and 35% haven’t received any form of reimbursement from their bank after being a victim of fraudulent activity.
The exponential global growth of scams means that the damage to reputation can spread quickly and have a lasting impact. Financial institutions recognise this impact, with 67% saying they face challenges retaining customers if they are associated with an online scam.
Consumers also trust themselves to detect scams, with over half of consumers (53%) believing they do the best job of protecting themselves from scams. Trust in banks was just slightly ahead at 57%.
The types of ‘scams’ consumers said they can protect themselves from included all types of fraud such as phishing for PII data, romance scams, investment fraud, bots or malware for account take over purposes, and other undisclosed vectors. However, only authorised fraud, such as authorised push payments (APP), are generally considered by a financial institution to be a scam.
The root of the scam problem is a disconnection between financial institutions and customers in the form of the language gap. To resolve this, financial organisations need to develop a comprehensive understanding of what a consumer deems to be a scam and how they want to be supported, which will help them and other organisations address the challenges of fraud and scams head on.
The scale of the challenge businesses face in protecting their customers is also significant. Scams operate across all geographies and channels and via a range of tactics. Organisations need a comprehensive approach including using anti-fraud technologies that address all kinds of fraud. This is the first step – along with finding a common language with customers around the threat of scams – towards repairing and rebuilding the trust that fraud can damage so easily, and better protecting a business’ hard-won reputation.