More than half of US consumers – 53 per cent – are still worried about identity theft

More than half of US consumers – 53 per cent – are still worried about identity theft even though financial institutions and merchants have taken extensive measures to restore consumer confidence, said a report by independent research and advisory firm, Financial Insights. Identity theft victim rates have levelled across the US compared to 2005, when the West Coast experienced rates double the national average, and consumers have ceased behaviour they perceive as risky, particularly providing personal information online. "It is critical that banks understand the behaviours of consumers facing identity theft fears in order to develop effective data security strategies and mitigation plans," said the report’s author Karen Massey. "The issue of identity theft is dissuading consumers from using self-service channels, and costing banks $50 billion annually in consumer reimbursements for fraudulent activity." The report found that 8.6 per cent of consumers surveyed, up from 5.7 per cent in 2005, stated they would switch banks to reduce the risk of becoming a victim of identity theft. An additional factor was that consumers under the age of 34 tended to be less loyal to one institution. "Financial institutions must recognise the inherent fickleness of this generation, particularly when security is a factor, and develop strategies to attract, but more importantly, retain these customers. Ensuring a safe online environment is essential to this highly sought-after group of consumers," said Ms Massey.