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Beware of False Declines: Survey

False declines, rejecting good transactions because they are thought to be fraudulent, can prompt millennials to change financial institutions, according to an Aite Group/Iovation survey.

More than 42 percent of consumers said that a false decline would motivate them to leave their banking institution altogether.

False declines occur when a valid transaction by the authorized cardholder is erroneously declined. Last year in the U.S. market, approximately $264 billion in card transactions were lost due to false declines from suspicion of fraud in 2016 and is projected to grow to $331 billion by 2018.

The report found that consumers’ willingness to leave their bank over a false decline was directly correlated to their age, with 59 percent of millennials, or “digital nomads”, admitting to being very or somewhat likely to leave their financial institution due to a credit card false decline. In contrast, just 21 percent of seniors would be inclined to leave their issuer over a false decline, suggesting that millennials are far less forgiving of the aggravation than older generations. Gen Xers and Baby Boomers fell somewhere in the middle, with 39 percent and 32 percent, respectively, willing to leave their banks due to a false decline event.

Another deciding factor in whether consumers stayed with their banks was income level. Forty-four percent of consumers with income over $100,000 per year and 48 percent of consumers with income between $75,000 and $99,999 per year say they are very likely or somewhat likely to leave their financial institution due to a mistakenly declined credit card transaction.

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