SURVEY: Consumers Are Ignoring Cybersecurity Risks Despite Identify Theft Concerns

AI-driven identify theft and deepfakes are top cybersecurity concerns for consumers as the technology evolves

Columbus, OH - As consumer reliance on technology deepens-through the convenience of digital payments, QR codes, eCommerce, and other online interactions-they are rightfully alarmed by the escalating threats of cybercrime, particularly identity theft and AI-assisted attacks.

Despite these concerns, a new survey from Nationwidereveals a troubling disconnect between consumer awareness and action: While 80% of respondents express concern about identity theft, only 16% report having identity theft insurance, as many continue to neglect essential cybersecurity precautions that could protect them.

Cybercrime is becoming more personal for many U.S. consumers.
The survey found that 52% of consumers encounter threats through spam phone calls, while 47% report facing risks via personal email. Alarmingly, 41% of respondents have either been victims of identity theft or know someone who has, and 33% have been notified that their personal data was involved in a company's data breach within the past year.

"Cybercrime poses a profound threat to U.S. consumers, as criminals' methods and the technology available to them evolves and improves," says Sarah Jacobs, Nationwide Vice President of Personal Lines Product Development. "Identity no theft can devastate individuals financially and emotionally, leading to long-lasting repercussions that can hinder personal and professional opportunities. Consumers must take these threats seriously and work to safeguard their personal information and finances or insure against the possibility that their information is stolen."

Complacency and misconceptions could be leaving consumers vulnerable to cyber threats
Despite being highly concerned, the survey found a disturbing trend-complacency and misconceptions are leaving consumers vulnerable. The overwhelming majority of respondents - 77% - have accepted the risk of identity theft as a normal part of life. Unfortunately, only 28% admitted that they have never sought more information about cyber protection, due to misconceptions surrounding the cost and effectiveness of identity theft coverage. The most common misconceptions are:

• 55% believe they need a separate policy for each family member.
• 49% are unaware of the potential damage identity theft can inflict on their credit score.
• 48% think hiring a lawyer is essential to recover their identity.
• 35% do not understand how long it takes for their credit score to recover after an incident.
• 33% are unsure about the duration required to recover from identity theft.

Of the of survey respondents without identity theft coverage, 43% perceive the service as too expensive. Although cost is the top reason cited for forgoing coverage, almost half (45%) claim they would be willing to spend up to $24 a month. Closing this knowledge gap is critical to protecting digital footprints as robust protection can be secured for much less.

"As examples of data breaches and identify theft become common, it's understandable to see why consumers are becoming numb to this threat and accepting identity theft as a part of life," says Rachel Bush, Vice President of Technology Business Risk at Nationwide. "Given the increased risk, we need to break through the misconceptions surrounding identity theft coverage and emphasize that acting today is vital for protecting your financial future. Ignoring these risks can leave you vulnerable when you least expect it."

Deepfakes and AI-Assisted Attacks-A Widespread Concern
The rise and misuse of generative AI and deepfakes has only intensified consumer fears. A staggering 86% of consumers are worried about AI-assisted identity theft, with 73% specifically concerned about the implications of AI-generated deepfakes. Notably, 92% of Baby Boomers and 86% of Gen X express anxiety over these emerging technological threats. However, these concerns are not just limited to older groups, as Millennials (81%) and Gen Z (76%) also report being concerned about the new threats associated with this technology.

Their concerns are valid as 18% of respondents report they have been targeted by AI-generated deepfakes or know someone who has, highlighting the evolving nature of modern cybercrime.

"With the rapid evolution of AI-driven cybercrimes, now more than ever, consumers must take their security seriously," said Jacobs. "I urge everyone to connect with their insurance agents to explore the protection options available to them. These professionals are here to help you navigate this complex landscape and ensure you have the safeguards in place. Once a cyberattack occurs, it will already be too late. Don't wait to act."

Consumers often invest in protecting valuable physical assets like cars and homes. However, as life becomes more digitally integrated, it is equally crucial to consider digital protections like identity theft insurance. Cybercrime and AI-assisted attacks will only become more sophisticated, so it is critical for consumers to stay informed and take proactive measures to protect themselves. Identity theft coverage is not just an option-it is now essential.

With effective coverage available at low costs,and continuous education, the time for consumers to take control of their digital lives and protect themselves from the inevitable risks that lie ahead is now.

Survey methodology:
Nationwide commissioned Edelman Data & Intelligence to conduct a 20-minute quantitative online survey among a sample of 1,000 adult U.S. general consumers between July 26 and August 14, 2024. As a member in good standing with The Insights Association as well as ESOMAR Edelman Data and Intelligence conducts all research in accordance with local, national and international laws as well as in line with all Market Research Standards and Guidelines.