More than one in four consumers had a debit or credit card replaced in 2009 due to security issues, according to a research firm that tracks the financial services industry. The reasons vary from lost cards that had to be replaced to security concerns. According to the research firm Javelin Strategy, a large number of those had more than one card replaced or a card reissued more than once. Javelin conservatively estimates that the cost to financial institutions to reissue cards was $252 million in 2009.
Among the research findings:
Changes in the law in the majority of states, as well as a new rule that went into effect June 1st, mean that banks and other financial institutions must do more to identify and detect “red flags” that signal possible identity theft. Yet the study found that these notifications are not appropriately spurring consumers to action. If you have been notified by your bank that there has been a security breach on your account, you are nearly five times more likely to experience fraud than consumers who have not been contacted about such breaches, according to Javelin. The report costs $1,200 but you can read a press release about it here.
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