Despite the introduction of more secure chip technology (also known as Europay, Mastercard, and Visa, or EMV technology), credit card fraud remains a concern for retailers and consumers everywhere.
The latest data reveal that criminals aren’t giving up on card theft; they are just changing their tactics. This post provides a snapshot of recent credit card fraud statistics so that you can stay informed.
Global Impact
Card fraud losses are a huge problem. The Nilson Report, a publication covering global payment systems, reported recently that global card fraud losses equaled $22.8 billion in 2016, an increase of 4.4 percent over 2015. That amount does not include costs incurred by retailers, card issuers, and acquirers for their operations and chargeback management.
Consumers are unfortunately familiar with the risky retail fraud landscape. Identity theft, which is a type of fraud that often leads to unauthorized card transactions, reached a record high in 2017, with 16.7 million victims (as reported by Javelin Strategy & Research), more than 1.3 million more victims than the previous year.
According to the Consumer Sentinel Network Report put forth by the Federal Trade Commission, identity theft made up nearly 14 percent of all customer complaints in 2017.
According to 2016 data released by ACI Worldwide and financial industry consultant Aite Group, nearly 1 in 3 consumers globally have been victimized by card fraud in the past five years. The benchmark survey also reported that 14 of the 17 countries surveyed experienced an increase in card fraud between 2014 and 2016.
Mexico and Brazil topped the list of countries that are currently experiencing the most card fraud, and the United States held its own in third place. According to the report, the United States “is the only country to remain on the top three list both years, due in part to being a laggard in the roll-out of EMV chip cards.”
Credit Card Fraud Statistics in the United States
In 2016, personal finance website ValuePenguin analyzed data from the Federal Trade Commission (FTC) and discovered that the number of credit card fraud complaints in 2015 was more than 41 percent greater than the number of reported cases in 2014. (The increase in data breaches may be to blame.) California had the greatest number of reported cases (12,800), while Florida led for the most per capita credit card fraud complaints (7,999).
Future Predictions
A 2016 iovation/Aite Group study on EMV’s projected impact on financial fraud reports that credit card fraud losses may climb to as much as $10 billion in the United States alone by 2020. The prediction sounds extreme, but the study’s authors relied on credible sources for their information: they looked at the past experience of countries like the UK, Canada, and Australia where EMV technology had already been implemented. In addition, the study interviewed sixteen major credit and debit card issuers and four of the largest payment processors in the United States.
On a related note, it is estimated that the majority of that expected fraud (~$7.2 million) will come from card-not-present (CNP) fraud via online and mobile channels. Security issues surrounding the use of traditional swipe cards will likely migrate online as merchants finalize their EMV rollout.
This post was originally published in 2017 and was updated September 26, 2018.
