Americans are more worried about credit card fraud than they are long-term savings accounts, such as workplace retirement plans, IRAs and annuities, according to a LIMRA Secure Retirement Institute (LIMRA SRI) study.
The report, Financial Fraud and Retirement Accounts: An Opportunity to Engage, Educate and Build Trust, found that 79 percent of American consumers are concerned about financial fraud, with 36 percent saying they were very concerned. The study found that one-quarter of Americans report that they have been victims of financial fraud, with 13 percent victimized in the past two years.
The study found that 83 percent of American cardholders say that they are concerned about credit card fraud, while just 53 percent of retirement plan savers are concerned about their workplace retirement plan.
"While it may be natural for consumers to worry more about products they use more often, recent LIMRA research confirms that the incidence of fraud is increasing among individual life insurance contracts, individual annuities and DC retirement plans,’’ noted Ryan Scanlon, associate research analyst, LIMRA SRI. “This evolution is driven not only by the increased appeal of financial accounts that hold larger pools of money, but also by new developments in security for credit and debit cards that have prompted criminals to reevaluate their targets," he said.
Scanlon pointed out that the 30-percentage point difference between consumers who are concerned over their credit card and those who are concerned over their retirement plan highlights a dangerous blind spot – one which offers financial service companies an opportunity to engage their customers in a truly meaningful way.
LIMRA SRI cited a 2018 report, The 18 Identity Fraud: Fraud Enters a New Era of Complexity, by Javelin Strategy & Research, which pointed out that identity fraud victims in the U.S. lost $16.8 billion in 2017 and account takeover victims spent 15 hours on average in resolving fraud in addition to paying out-of-pocket expenses.
"The good news is LIMRA SRI finds that consumers are very open to learning about fraud prevention. In fact, 2 in 3 consumers (67 percent) indicate they want to receive information about how to detect and prevent financial fraud," Scanlon said.
According to the report, other top sources of information consumers identified included credit bureaus (45 percent), financial advisors/planners (32 percent) and companies that manage retirement savings plans (29 percent).
The study was based on a survey of 1,005 American consumers aged 18 and older, fielded in August 2018. All survey results were weighted to represent the U.S. adult population.