The purpose of this paper is to investigate consumer behaviour as it relates to identity theft and fraud.
Using survey data, this paper models the relationship between past experience of consumers and their levels of concern, and derives the principal components that make up consumer behaviours.
The components are physical prevention measures, account monitoring, agency monitoring, password security, and risky behaviour avoidance. These components were found to be almost orthogonal, implying that consumers tend to “buy into” a particular component of behaviour. The proposed model of consumer behaviour, while statistically significant, did not have high predictive value.
The survey data used were collected without reference to the model used in this paper, which limits the efficacy of the model.
Consumers use all the behaviours in one component without regard to other components. This can leave “holes” in consumer defence against identity theft and fraud. Consumer education on identity theft and fraud needs to stress that consumers need to employ all behaviours that can minimise risk and loss.
This paper puts forward an initial model of consumer behaviours as it relates to identity theft and fraud. The derivation of the orthogonal components of behaviour is a new and important finding.
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