Credit card fraud is defined by Wikipedia as “a wide-ranging term for theft and fraud committed using or involving a payment card, such as a credit card or debit card as a fraudulent source of funds in a transaction. The purpose may be to obtain goods without paying, or to obtain unauthorized funds from an account.” A closer look at the latest statistics shows why we need to stay on top of the latest methods of credit card fraud protection.
According to online statistics database Statista, the value of payment fraud losses in the United States rose from $5.6 billion in 2012 to an estimated $9.1 billion in 2018. Card issuer losses occurred mainly at the point of sale from counterfeit cards (on the decline), while the largest merchant losses were driven by card-not-present (CNP) transactions (on the rise) when customers buy online or pick up in store.
In 2015, credit card and debit card gross losses accounted for roughly 6.9 cents per $100 in total volume, up from 5.7 cents per $100 in 2014. Retailers are spending an average of $6.47 billion annually on credit card and debit card fraud prevention.
Victims of identity theft resulting in unauthorized credit card and debit card fraud hit a six-year high of 15.3 million in 2016. Identity theft fraudsters most often targeted existing accounts. Major data breaches account for a huge source of identity theft information for fraudsters. The Theft Resource center reports that there were 791 data breaches reported in the United States in 2017 at mid-year. That represented a 29 percent increase over the same period in 2016. The Federal Trade commission online database of consumer complaints compiled 13 million complaints from 2012 to 2016. Forty-two percent of those were fraud related, and 13 percent were identity theft complaints.
Below are some other interesting credit card and debit card fraud statistics from the Statistic Brain Institute:
- Percent of Americans who have been victims of credit card fraud: 10
- Percent of Americans who have been victims of debit card fraud: 7
- Median amount reported per credit card fraud (in dollars): 399
- Percent of financial fraud related to credit cards: 40
- Incidents where an email started as the initial point of contact for credit fraud: 48
- State with highest rates of credit card fraud: Nevada
- State with highest rates of credit card fraud per 100,000 population: Mississippi (later statistics say Florida)
Below are some credit card fraud protection tips for yourself and others in your organization or personal life:
- Never save payment data on online retail sites.
- Check your credit card statements and credit reports regularly.
- Only use debit or credit cards with EMV chips.
- Beware of card skimmers; examine ATMs and self-pay terminals before using to check for foreign devices or anything unusual.
- Report suspected fraud to the card issuer immediately.
- Never carry PINs with you – memorize them.
- Use only secure, well-lighted, ATMs under video surveillance.
- When typing in your PIN, hide the numbers with your free hand.
- Clean stored information off your computer after using it. This is especially important when using a public computer.
- Change log-ins and passwords monthly—a pain for sure, but it’s worth it.
- Shred sensitive documents.
- Never give your account information over the phone until you verify the other party’s legitimacy. NEVER give out your information to someone who calls you.
- Never click on a website requesting you to “update” your information. Independently contact the requestor to verify. These unsolicited requests are usually scams.
- Save receipts and verify against statements.
- Don’t mail sensitive documents from your mailbox using the flag. Use a postal box instead.
While EMV cards have curtailed “fake card” fraud, data breaches and the personal information they make available to fraudsters continue to rise. As always, fraudsters are quick to change methodologies when confronted with methods of defense. Learn these new credit card fraud protection methods and take steps to safeguard yourself and your company. And tell others.
This post was originally published in 2017 and was updated June 19, 2018.