Report: Transaction Delays from Anti-Fraud Efforts Can Run Off Consumers

Jan. 30, 2012

New research from American Express-owned e-commerce anti-fraud technology provider Accertify found that 63 percent of “connected” U.S. adults (consumers with access to both a smartphone and a Web-enabled computer) believe more fraud occurs when conducting transactions online than in person. However, the report said, consumers who encounter a bad experience with a fraud prevention program will change their shopping behavior. “It is clear that narrow fraud programs can actually push legitimate customers away,” said Jeff Liesendahl, senior vice president of Accertify at American Express. “Merchants with inflexible fraud prevention technology or who manually review every suspect transaction end up delaying and denying legitimate transactions. Therefore, it is critical for merchants to have a fraud prevention solution that automates and prioritizes transaction screening and is fully customized to each merchant. By pairing unique flagging criteria with an upfront screening process, merchants can effectively identify and protect against emerging fraud schemes while ensuring legitimate customers are not inconvenienced.” More than a quarter of consumers (28 percent) have encountered a fraud protection system that unnecessarily delayed or denied their transaction, the survey found. Among consumers who have experienced transaction delay or denial, 35 percent said they would penalize the business responsible for an improperly delayed or denied transaction by moving or considering moving their business to a competitor, and 11 percent of consumers simply switched to a competitor immediately.