IBM Study Finds Broad Differences in Geographical, Generational Impact of Financial Fraud and Attitudes Toward Financial Institutions

Study finds Americans average a higher frequency of fraudulent charges than other countries, while total value of theft is highest in regions outside of US

According to a new report commissioned by IBM, geographies and generations differ greatly in the frequency and impact of financial fraud, as well as their attitudes toward fraud detection and the institutions responsible for protecting them from bad actors.

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The 2022 IBM Global Financial Fraud Impact Report also found that as global consumers have moved nearly exclusively to credit card and digital payments, US citizens have been victimized more regularly than all other countries surveyed in the report, costing American consumers an average of $265 per year in fraudulent financial charges made by unauthorized third parties.”Financial fraud and cyber threats are a growing menace to global financial institutions and their clients, increasing the need for companies to accelerate preventative measures to stay ahead of sophisticated criminal activity,” said Shanker Ramamurthy, Managing Partner, Global Banking & Financial Markets, IBM. “As the global economy’s evolution toward a cashless society continues at breakneck speed, banks and other financial institutions must continue to invest in modernizing their infrastructure and bolstering critical talent to meet the challenges they face from bad actors.”

According to the report, when it comes to fraud on a global scale, American citizens are the most frequent victims of debit card fraud of all the countries surveyed. Americans also registered a large percentage of instances when it comes to being victims of credit card fraud, banking fraud, or digital payment fraud, when respondents were asked about their experiences using digital payment apps including PayPal, Venmo and Square. American respondents also spent the most time trying to recover money lost due to fraudulent charges.

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However, US credit and debit card users reported the second lowest amount of money lost on fraudulent charges out of the countries surveyed. Only Japan reported a lower amount of losses over the last 12 months, while Germany, by far, was the most victimized country, with respondents losing more than three times the total financial amount of the second most victimized country (Singapore).

Across all countries, respondents believe banks are the financial institution most responsible for preventing fraud, when asked about their experiences using payment networks including Visa and Mastercard. In most countries, consumers see banks as the most responsible financial institution for preventing fraud, with a higher percentage in Brazil, while in Japan, payment networks were the financial institutions most likely to blame. In China, respondents registered the highest percentage of consumers who think government regulators are most responsible for preventing fraud.

In the US, nearly one-quarter of all respondents (22%) are not confident in their bank or credit card’s ability to handle fraudulent charges or suspicious activity, not nearly as much as Japan, where almost one half of respondents claim to not have faith in their financial institutions.

One quarter of Americans (25%) report spending less than an hour a year checking their accounts for fraudulent activity – while more than two out of five US consumers (44%) spend less than ten hours per year checking their banking accounts.

With the US experiencing the highest number of financial fraud instances, it would make sense that the US has the highest percentage of respondents who had to contact their bank or credit card company to either cancel a card, dispute a charge, or reported losing money as the result of fraudulent charges.

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