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

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 revealthat UK consumers' apathetic attitude to fraud could be helping toperpetuate the rapidly growing identity theft industry, which is nowestimated to be costing UK businesses GBP 1.3 billion per year.(1)

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

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

Of those U.K. households surveyed, the research revealed thatsignificant proportions are now banking online, with up to 30 percentof consumers using the Internet to check their balances or conductroutine transactions. Overall, men are more likely to bank online thanwomen (34 percent vs. 26 percent), and the 25-34 age group is the mostlikely to bank online.

The research reveals that despite the high incidence of identitytheft, most consumers are not interested in proactively helping tomanage the risk of fraud. Fifty-eight percent of respondents surveyedadmitted that they had no desire to be educated about banking securityor fraud protection. Fifty percent of consumers would not switch theirbank or building society to obtain better security or protection.

Consumers also showed low levels of interest for additionalsecurity services. Sixty-six percent of respondents declined whenasked if they would pay for better fraud protection. When asked whatthey personally can do to help protect their identity and prevent cardfraud, 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 forthose over 65, where 22 percent indicated that they believed there wasnothing they could do.

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

Commenting on the findings, Nigel Moden, Retail Banking Partner atUnisys, explains, "UK consumers appear to be happy to continue bankingblindly, regardless of the threat of identity theft. Thislaissez-faire attitude not only encourages increasingly audacious andindustrial-scale fraud but also translates into millions of poundsbeing 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 combatfraud before it happens through improved fraud detection technology.At the same time, there needs to be a renewed commitment to effectiveconsumer security education, with the financial institutionspotentially incentivising consumers to join the fight against fraud."

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

Editors Notes

(1) *Source Which? Report- March 2005

About the Survey Methodology

The survey was conducted on behalf of Unisys between 19 and 22June 2005. One thousand households were contacted, with resultsweighted to represent British households. Of those individualscontacted, 922 had account(s) at a bank or building society and thusform the basis for this report.

About Unisys

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