Consumers awareness raising on non-cash payment fraud
Consumers awareness raising on non-cash payment fraud


2011 06 14

Consumers Lack Information about Non-Cash Payments

The sociological survey carried out by the Lithuanian Consumer Institute in the second half of the last year has shown that consumers lack information about safe non-cash payments and the rights they have as consumers. 

Risk Awareness and the Use of Safety Measures

The survey carried out by the Lithuanian Consumer Institute which aimed at finding out how consumers perceive risk they are exposed when making non-cash payments and what precautions they take has shown the consumers protect their personal data by restricting the placing of their personal data on the internet (52 per cent), using anti-virus programmes, firewalls (50 per cent), while 34 per cent noted that they even avoid making payments online. Only 8 per cent replied that they did not use any measures to protect their personal information, because they had no knowledge about it.

Among the threats most common on the internet the respondents identified identity thefts (72 per cent), e-mails which phish out passwords (70 per cent), spam (67 per cent) and computer viruses (76 per cent).

As shown by the survey, online risk awareness most often depends on the age of the respondents - the respondents in the youngest age group know most of all while the oldest respondents know considerably less.

Without sufficient knowledge about potential threats on the internet and without any safety measures, consumers can suffer financial losses, e.g., important personal information can be collected by computer viruses, links to the websites of fake banks or other payments institutions sent in unsolicited e-mails can lead to an identity theft and can make fraud possible in non-cash payments.

Fraud involving identity thefts and personal data

Taking into consideration the fact that the disclosure of personal data on the internet provides opportunities for scammers to take advantage of them when payments are made, the survey investigated how consumers understand personal data. The respondents most often attributed the personal ID number (95 per cent), the name and surname (77 per cent), the data of payment cards (59 per cent) to personal data, while the telephone number was considered as personal data by 37 per cent, photographs by 26 per cent, e-mail address by 18 per cent, and patronymic by 17 per cent of the respondents. Thus, the data of the survey show that consumers are not sufficiently aware of the content of the concept of personal data and it can be one of the reasons of the excessive disclosure of data on the internet thereby making it possible for fraudsters to appropriate them and later use for financial crimes on the electronic space.

On the other hand, the respondents stated that the instances of abuse of personal data when somebody else used another person's payment card, withdrew money from ATMs, took loans in the name of another person were encountered especially rarely (up to 2 per cent).

No website security checks in online payments

The majority of the respondents (78 per cent) do not use their payment cards to pay for goods or services online. Payment card are more often used for online payments by younger, highest education, highest income receiving participants of the survey and by the respondents residing in major cities.
One third (33 per cent) of the respondents feel insecure when they make payments online, nevertheless, most of them (76 per cent) do not verify the website security before making payment.

Doubts about consumer rights

It turned out during the survey that the respondents are uncertain if they can recover the money if their lost card is used by somebody else. 42 per cent of the respondents tend to think that recovering the money without court is impossible in such a case. 35 per cent think that if the person has lost his/her card unintentionally, it is possible to recover some of the money out of court, and 34 per cent believe that if a payment card is lost accidentally and somebody else makes an unauthorised payment, the card owner has the right to recover all money out of court.

In case the bank does not agree to compensate for the amount spent as a result of unauthorised use of the lost payment card, most often the police is contacted (53 per cent). 15 per cent of the respondents stated they would first of all apply to the court, 12 per cent would contact the State Consumer Rights Protection Authority.

Most prevalent crimes

- Online payments: fraudsters buy or steal payment card numbers and passwords of other persons and use them to purchase online as well as withdraw money from bank accounts.

- Withdrawal of money: criminals use forged data of payment cards written on the so-called "white plastic" and in this way cash out money from ATMs.

- Thefts of payment card data: criminals illegally attach devices to ATMs to read the payment card data of other persons. Fraudsters use such data for unlawful transactions on the internet.

- Telephone fraud: criminals introduce themselves, for example, as employers, representatives of state authorities and obtain data to access bank accounts.

A large proportion of such crimes is committed as a result of irresponsible behaviour of payment card owners with their personal data: PIN codes are kept together with the payment card in the same wallet, other persons are allowed to use the card, the card is not blocked in case of its theft, PIN codes are sent openly by e-mail or SMS, etc.

The majority of criminal acts related to non-cash payments are committed on the internet. It should be noted that only 2 years ago half of all attempts of criminal transactions using payment cards involved ATMs or points of sale.

About the survey

In the second half of 2010, the Lithuanian Consumer Institute carried out the representative consumer opinion survey and surveyed 1009 respondents all over Lithuania.

The survey is a part of the project "Consumers awareness raising on non-cash payment fraud". It is co-financed by the 2009 Programme on Prevention and Fight against Crime of the European Commission, the Lithuanian Consumer Institute. Project partners: the Association of Lithuanian Banks and the Police Department under the Ministry of the Interior of the Republic of Lithuania.

Illustrated by Ilja Bereznickas 

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