By Jessica Duncan, AVP Research & Insights

The pandemic expedited our nation’s dependency on living digitally, and that new dependency exposed a larger audience to the growing threats of fraud and identity theft. As data compromises accelerate and scammers become more sophisticated, companies must work harder to protect customers and their information., including through their marketing efforts.

Yearly Data Breaches Have Doubled Since 2019
Publicly reported data shared by the Identity Theft Resource Center (ITRC) cited that over 416 million victims were impacted as a result of 3,200 data breaches in 2023, a staggering 150% increase in the number of data breaches reported in 2019. In the first quarter of 2024, 841 breaches were reported, a pace that is on its way for 2024 to surpass the impact seen in 2023. Competiscan watched as fraud prevention marketing exploded in 2022 after the rise in data breaches occurred in 2021. Fraud-based marketing trailed off slightly in 2023 but overall remained elevated as companies took note of the important role customers played in prevention. As you might expect, ITRC reported that the two largest industries affected by data compromises were financial services and healthcare.

In the past five years, Competiscan observed the largest influx of fraud marketing in the credit card, retail, and banking sectors. Fraud marketing observed in the Insurance sector and other verticals like consumer services and telecom have remained relatively flat year over year. Thankfully, fraud detection and prevention technologies have also advanced due to AI and machine learning, but even if every company invested in and implemented the latest fraud prevention measures, there is another critical player in keeping information safe – the customer. If you are wondering how your organization’s fraud marketing efforts stack up, here are four key strategies to review.

Fraud prevention marketing does not have to be complicated. It can start with a simple strategy of ensuring customers understand your security tactics and know what you will or will not ask them to share. Along with email, social media can be a cost-effective way to promote this information. Another tactic that can be implemented is to integrate messaging into existing customer communications. This approach was demonstrated by New York Life, who placed a reminder within its annual policy notification that they would never ask clients for private information through email.

The next phase of fraud prevention marketing is to raise awareness of security measures offered to your customer base. This might be informing customers of new standard practices implemented by the company, like multi-factor authentication, or optional services, like the ability to enroll in account alerts. Multi-factor or two-step authentication has become a common requirement for companies to verify a customer’s identity. To the everyday consumer, this terminology could sound complex. Recently, BMO Harris Bank dedicated an email campaign to explain to its customers what a One-Time Passcode was and what to look out for since these verification code texts are also now being targeted by scammers.

Optional services, like account alerts, are largely promoted by financial institutions as a proactive way for customers to monitor and prevent fraud. Alabama ONE Credit Union used a clean, easy-to-read email to build adoption of its fraud alerts. The message was broken down into three parts:
1) The Why – Help us keep your account safe
2) The Response – If fraud is suspected, we will contact you
3) What to Look For – The fraud alert will look like this

Providing a visual of an actual fraud alert text is a notable marketing practice. It’s important to keep in mind that many customers will not receive these alerts frequently, and if they should, the customer needs to be confident that the alert they are receiving can be trusted.

Educating customers of the ever-growing and changing list of the types of scams can be complex. However, it could also be the most impactful step marketers can take in preventing fraud. Competiscan has observed a number of institutions feature different scam techniques. This approach provides real-life context and raises awareness that scams don’t always happen as consumers might expect. Some of the recently described scams include the Romance scam, the Grandparents scam, the Pay Yourself scam, and vacation scams.

The frequency now required to keep customers up to date has driven some organizations, like Ally Bank, to develop a security-themed newsletter. This gives the bank a dedicated channel to provide security and fraud-related updates to its customer base. Others are providing information on their websites or as a part of their resource hubs. Meanwhile, Bank of America offers a security meter. This gamification approach provides customers with a rating that increases as the customer takes account-related actions that improve their defense against fraud.

Unfortunately, millions of consumers each year will still fall victim to fraud or identity theft. To prepare customers for this situation, the last key component to fraud prevention marketing is fraud resolution. Companies should proactively share what actions their customers can take if they suspect fraud has happened to them.

In the examples below, Affinity Federal Credit Union launched an email campaign outlining three steps to take if a member thought they were a victim of fraud. The actions included calling their financial institution, reporting it to the local police, and contacting their State Attorney General. Elsewhere, FirstBank used social media to redirect customers to an online article featuring “4 easy steps” to prevent fraud. Notably, the article emphasized the importance of freezing their credit if fraud was suspected and ended with a message to the customer to stay vigilant.

Vigilance is a great way to close out our message to marketers. Fraud prevention should be treated as a necessary and ongoing part of your marketing strategy. Be mindful of how your organization can stay in front of your customers and help keep their attention high to the fraudulent threats that exist around them.

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