News

US millennials apt to bail on bank accounts following fraud incident

June 8, 2016

New research from FICO reveals that while 22 percent of U.S. consumers will close a bank account following a fraud incident, 29 percent of millennials will close all accounts with their bank.

What's more, of those in the 25–34 age bracket, 25 percent said they would post a negative comment on social media if a fraud incident were not handled well, and another 21 percent would actively discourage a friend, family member or coworker from using the bank, FICO said in a press release.

Conversely, of those who said they were victims of fraud within the past year but had a positive fraud-management experience with their bank, 41 percent recommended their bank to others and 34 percent went on to add new accounts with the same bank.

"Increasingly, peer reviews are more influential than any advertising or marketing program, especially with millennials, who now represent 80 million U.S. customers and $200 billion in annual buying power," said T.J. Horan, vice president of product management for fraud solutions at FICO. "This is why the most successful banks have recognized fraud is more than a cost-containment problem and are investing in state-of-the-art fraud management platforms that give the customer a greater sense of ownership and control."

Banks are also ramping up customer-empowering fraud prevention efforts including consumer-driven card protection services, identity theft units, education campaigns and tailored customer communications.

"There is a strong desire from consumers to participate in fighting fraud through methods such as better alerts and communication with their banks," Horan said. "By closing this loop with their bank, consumers can help to protect themselves."

FICO conducted the online survey of approximately 1,000 U.S. consumers over the age of 17 in October and November 2015. Data was weighted by age and region to reflect U.S. census data.