Article - Results of Consumer Complacency

UK Market Ripe For Fraud: Unisys Research Reveals Consumer Complacency and Poor Security Education Breed Ideal Conditions for Identity Theft and Fraud

Business Wire – August 3, 2005 LONDON -- Unisys Corporation (NYSE:UIS):

Unisys UK Consumer awareness survey into identify theft reveals:
· 11% of UK consumers have been the victims of identity theft and fraud
· 58% have no desire to be educated about fraud
· 61% have no concerns about the safety of bank or building society accounts (only 9% worry a lot compared to almost twice that for U.S. consumers)
· 73% of consumers have never been contacted by their banks to discuss potential fraud
· 50% would not switch banks or building societies if offered better security protection

Survey results Unisys Corporation (NYSE:UIS) launched today reveal that UK consumers' apathetic attitude to fraud could be helping to perpetuate the rapidly growing identity theft industry, which is now estimated to be costing UK businesses GBP 1.3 billion per year.

The independent study, commissioned by Unisys, surveyed 1,000 UK households to investigate the incidence of and attitudes towards financial fraud. The findings revealed that more than one in 10 UK consumers (11 percent) have now been the victims of fraud.

Despite these statistics, 61 percent of respondents stated that they have no concerns about the safety of their money kept in their bank or building society. The survey followed a similar study Unisys conducted of U.S. consumers in August 2004, which found that only 49 percent of U.S. respondents were not worried about their money.

Of those U.K. households surveyed, the research revealed that significant proportions are now banking online, with up to 30 percent of consumers using the Internet to check their balances or conduct routine transactions. Overall, men are more likely to bank online than women (34 percent vs. 26 percent), and the 25-34 age group is the most likely to bank online.

The research reveals that despite the high incidence of identity theft, most consumers are not interested in proactively helping to manage the risk of fraud. Fifty-eight percent of respondents surveyed admitted that they had no desire to be educated about banking security or fraud protection. Fifty percent of consumers would not switch their bank or building society to obtain better security or protection.

Consumers also showed low levels of interest for additional security services. Sixty-six percent of respondents declined when asked if they would pay for better fraud protection. When asked what they personally can do to help protect their identity and prevent card fraud, the most frequent response was to destroy personal information, such as bank statements, more carefully (80 percent). Interestingly, responses did not vary significantly by age or gender, except for those over 65, where 22 percent indicated that they believed there was nothing they could do.

The banks and building societies appear to be doing little to overcome consumer apathy, with three out of four consumers (73 percent) claiming that they had never received personal contact to discuss potential fraud alerts or to verify transactions. When asked if they were aware of the security phenomenon "phishing," only 9 percent of consumers had heard about "phishing" from their bank or building society.

Commenting on the findings, Nigel Moden, Retail Banking Partner at Unisys, explains, "UK consumers appear to be happy to continue banking blindly, regardless of the threat of identity theft. This laissez-faire attitude not only encourages increasingly audacious and industrial-scale fraud but also translates into millions of pounds being stolen each year from customers in the UK. At the moment, consumer self interest and the interest of the banks is not aligned, as the financial risk largely rests with the financial institutions. The real challenge and opportunity is for the banks to better combat fraud before it happens through improved fraud detection technology. At the same time, there needs to be a renewed commitment to effective consumer security education, with the financial institutions potentially incentivising consumers to join the fight against fraud."

Moden concludes, "At the moment, many financial institutions' fraud systems are unprepared to address sophisticated forms of identity theft. What started out decades ago as leading technology at banks is now a convoluted patchwork of systems. Banks and any company that collects data need to get much better at integrating knowledge and information across all channels - branch, online, telephone, etc. - to create a fraud monitoring 'ecosystem' that holistically addresses the problem. Only with stronger, more coordinated systems can banks continue to safeguard the trust customers put in their brand."

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