Does identity theft insurance undermine risk perceptions and increase risky behavioral intentions?

Abstract

A survey was conducted to study the impact of identity theft insurance on consumer risk perceptions and their risky behavioral intentions. By using the data collected from this survey, we were able to elicit and estimate subjects' risk perceptions toward identity theft and also their intentions to engage into risky online shopping activities which may endanger their personal identity. The results show that identity theft insurance, as a curative remedy, does undermine individual risk perceptions of being victimized by the identity theft. Additionally, we also demonstrate that having identity theft insurance surprisingly increases consumer intentions to involve into the activities that could put personal identity at risk. Identity theft insurance, which is believed by consumers to protect their personal information, does have unintended impact with negative consequences on consumer welfare. This research provides valuable and deep insights for consumers, marketers, and government agencies to understand the identity theft insurance.