01/22/2021 | News release | Distributed by Public on 01/22/2021 05:50
Last year I blogged a lot about how payments and fraud patterns have changed. But despite the COVID pandemic having effected massive changes in the ways consumers transact, credit card fraud is still a 'thing,' and a big, ever-changing thing at that. In this blog post I'll do some quick level-setting with 2019 card fraud numbers, touch on what that looked like for 2020, and then share a round-up of several of the latest credit card fraud trends.
Exactly how big credit card fraud is depends on where you look. The U.S. Federal Trade Commission (FTC) is an important resource, taking in reports from consumers about problems they experience in the marketplace. The reports are stored in the Consumer Sentinel Network (Sentinel), a secure online database available only to law enforcement partners, which can use information in the database to spot trends, identify questionable business practices and targets, and enforce the law.
The graphs below show the top fraud types reported to the FTC in 2019 and corresponding dollar loss amounts.
Credit card fraud was the FTC's second most-reported fraud type in 2019. It's important to note that the numbers in the graph above reflect only the total 250,678 incidents reported to the FTC; a much higher number of credit card fraud incidents impact banks and issuers. The important point here is that's the second largest type of fraud reported to the FTC by consumers, indicating it's still a large problem and causing pain to the victims.
For example, in April 2020, early in the pandemic, The Wall Street Journal reported that fraud losses - including losses linked to credit and debit cards - cost banks, merchants and, in some cases, cardholders $16.9 billion in 2019, according to Javelin Research. Note the dramatically higher number here; $16.9 billion is more than 125 times greater than the $135 million, credit card-only figure from the Sentinel report.
Additionally, payment services provider FIS (a FICO Partner) said the dollar volume of attempted fraudulent transactions in April 2020 rose 35% over the prior year, a trend it expected to continue.
More recently, in December the Nilson Reportquantified global card fraud losses at $28.65 billion. That's nearly 7 cents per every $100 in spending, representing significant losses across issuers, acquirers, and merchants.
In times of rapidly changing fraud patterns, banks and card issuers that use FICO's fraud solutions are protected by numerous technologies that help detect more fraud, faster.
The irony isn't lost on me that those of us who fight fraud professionally are also susceptible to this crime as consumers. All of us need to protect ourselves from credit card fraud. For a quick refresher course, take a few minutes and read my colleague Liz Lasher's recent discussion with CNBC about how to prevent credit card fraud; her tips for the holiday season are relevant all year 'round.
Stay safe, fight fraud, and follow me on Twitter @FraudBird.