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PINs and passwords no longer offer enough protection against identity theft

09-Apr-2008

For as long as we can remember, most of us have been satisfied that our personal identification number (PIN) and passwords provided an adequate level of protection against fraud and identity theft.

However our attitudes are changing. New technology such as biometric voice identification is favoured over the older personal identification methods when dealing with organisations such as banks, airlines and insurance companies, according to a new survey conducted by Sydney-based callcentres.net on behalf of VeCommerce.

People are also willing to pass through complex identification processes, especially women, the survey found.

Online surveys were completed by 216 Australian men and women for the VeCommerce Identity Verification Study. The study aimed to understand the public's usage of and attitude towards processes used by organisations to verify identity.

Participants were asked to indicate whether they agreed, disagreed or had no opinion about statements relating to identity theft, sharing personal information and the use of technologies.

They were also asked to rate different methods of identity confirmation as vulnerable to theft or secure.

People of all ages are concerned about the security of their PIN numbers and passwords when they are used to confirm their identities to an organisation over the phone.

According to the survey, only 24% of people between 18 and 30 years of age (Generation Y) felt that revealing their PIN number was a secure method of confirming their identity over the phone, followed by a password (20%) and answering a personal details or history question (13%).

People between 31 and 45 years of age (Generation X) were even less convinced. Only 6% of people in this group believed that their password was secure, followed by providing personal details or a history question (10%) and PIN number (15%).

Instead, biometric voice identification was the preferred method of identification for 45% of men and 39% of women. 41% of Generation Y preferred biometrics. 41% of Generation X also preferred biometrics and 44% of people aged 46+ years (baby boomers).

Dr. Catriona Wallace, Managing Director of callcentres.net commented: "Identity theft and fraud is an issue for consumers we research. The results of this study suggest not only for younger consumer but across all age groups advanced technology such as biometric voice identification appears to be a viable and preferred option to more traditional methods such as PINs and passwords."

Overall, 63% of respondents mostly or strongly agreed that fraud and identity theft was a concern. 58% had been more careful about sharing personal information over the past two years and 47% felt uncomfortable about providing details over the phone to a call centre representative. 33% said they would feel more secure working with an organisation that employed biometric identification rather than a PIN or password system.

A further 37% mostly or strongly agreed that they would be willing to pay for a product or service to a company that is very proactive in securing their personal information. A smaller group (22%) said the more technology an organisation uses, the more they feel secure.

"The survey results highlight the increasing impact that security is having on the customer experience. High-profile instances of identity theft are leading Australian consumers to review their own situations and demand greater protection of their personal data from their suppliers," said Paul Magee, Managing Director, VeCommerce. "In a call centre environment, asking a customer a series of questions to verify their identity can be as frustrating for the caller as being kept on hold for an extended period"

Other survey findings included:

• PIN and password frustration. Many people surveyed agree that the use of PINs and passwords is frustrating, particularly baby boomer respondents (24%). Overall, 30% of respondents slightly agreed, mostly agreed or strongly agreed that it was frustrating and 24% agreed it was time consuming.
• Gender differences. The survey found that 75% of women are concerned about fraud and identity theft compared to 51% for men. Over the past two years, 69% of women have been more careful about sharing personal information and 44% would be willing to pay more for a product or service to a company that is very proactive in securing their personal information, compared to 47% and 29% for men respectively.
• Complexity welcome. Almost half (47%) of respondents preferred organisations to use a fairly complex process with fairly high security for identification while 17% preferred a very complex process with very high security. Only 2% wanted a simple or fairly simple process of identification.