High Fraud Rates Means Consumers Are Afraid

November 19, 2019

Americans think brands could do more to prevent customer service fraud and don’t trust that brands are handling their personal information securely.

Less than one in 10 (8%) of Americans believe the healthcare industry is proactive in leveraging technology to detect unusual activity on their accounts to prevent fraud, according to a new report.

As Americans are sharing their personal information with healthcare companies more and more, it is critical for healthcare executives to understand that three in 10 (30%) Americans would immediately cut ties with a business that experienced fraud.

Sitel Group and CallMiner’s 2019 Preventing Fraud & Preserving CX with AI Report, uncovered consumers’ experience and concerns around customer service fraud, voice assistants, and information security.

The report found that about 46% of Americans admit they have been a victim of fraud, but 92% think the risk of fraud is increasing in our day-to-day activities. Furthermore, nearly one-third have actually felt at risk for fraud when contacting a brand’s customer service department, and 47% said it was because they had to share personal information with a customer service agent.

“With a third of consumers feeling at risk for fraud when they call a brand, it’s important that brands utilize the appropriate technology and data insights to train customer service agents,” says Cris Kuehl, vice president, Analytics and Client Insights at Sitel Group, a customer experience management company, located in Miami, Florida. “When an agent can better explain why they need personal information from a customer it mitigates security fears and creates a better experience.”

In addition, the report found 86% Americans think brands could do more to protect customer information and prevent customer service fraud, and 28% of Americans do not trust the brands and companies with which they do business are handling their personal information securely.

"This data means that businesses, especially healthcare companies that are responsible for handling such sensitive data, must do a better job to reassure consumers their information is safe by better communicating how fraud monitoring is implemented into the system to protect them," Kuehl says.

Although 67% of Americans feel most comfortable contacting a brand or company they’re doing business with over the phone, 87% are still worried that sharing their personal information with a brand over the phone could make them vulnerable to fraud, the release says.

“With the advancements in AI and speech technology that we’ve encountered in the past few years, fraud monitoring has vastly improved,” says Jeff Gallino, CTO and co-founder at CallMiner. “While Americans understand the importance of fraud monitoring, it’s now time for brands to go a step further and better communicate to customers how fraud monitoring is implemented into the system to protect them.”

Despite customers feeling most comfortable contacting a brand on the phone, 71% of Americans worry that the personal information captured on call recordings could put them at risk for fraud. However, artificial intelligence (AI) may be the saving grace for brands looking to boost customer confidence.

Actually, not having technology like AI to monitor fraudulent activity on accounts may be a deal-breaker for consumers, the release says. More than half of Americans would stop doing business with a brand if they found out the brand didn’t use technology such as AI to monitor for fraudulent activity on their account.

Related: 6 AI Myths Health Execs Believe

Additional findings from the report include:

  • Customer’s believe banking and financial services are most susceptible to fraud

  • More than half of Americans (52%) think the banking and financial services industry is the most susceptible to customer service fraud. This is compared to retail (30%), healthcare (7%), and insurance (4%).

  • However, nearly two-thirds (65%) also believe the banking and financial services industry is the most proactive in leveraging technology, for example AI to detect unusual activity on their accounts to prevent fraud. This is compared to healthcare (8%), insurance (6%), and retail (5%).

  • Americans are skeptical of voice assistants for customer service, but interest is growing

  • Nearly one in five (18%) Americans have used a smart assistant like Google Assistant or Amazon Alexa to conduct a voice search and call a customer support phone number for a company. Those who belong to generation Z (23%) and specifically generation Z men (37%) are the most likely have used a smart assistant to call customer support.

  • The majority (65%) of Americans would not be comfortable making a purchase via a smart assistant.
  • Approximately 43% of Americans said they would not feel comfortable making a purchase via a smart assistant because they’re worried someone could hack into their device and steal their information, and 29% worried their information wouldn’t be stored safely by the channel.

  • While 85% of Americans do not use voice authentication, about 13% do.

  • Fraud is a concern across multiple customer service channels

  • The majority of Americans (47%) think contacting a brand’s/company's customer service department through social media presents the most potential for fraud. This is compared to phone (15%), voice assistants (14%), online live chat (10%), and SMS (4%).

  • While having to share personal information with a customer service rep is the top reason that people felt they were at risk for fraud when contacting customer service, other reasons include:
  • Having to share financial information with the rep, worrying that other people at the company would steal their personal information, and not trusting the customer service rep.

  • Americans are concerned about fraud that nearly 68% have questioned or wondered why a customer service or customer support representative asked for certain personal information.

"The data speaks for itself that consumer trust in the healthcare industry is dwindling, which means executives must make protecting their information a priority now," Kuehl says.

Briana Contreras is assistant editor of Managed Healthcare Executive.