We know credit card fraud is problematic and even with the safety mechanisms built into our accounts, courtesy of the credit card companies, the U.S. easily takes the number one spot for the most credit card fraud, with Mexico on our heels. For debit card fraud, it ranked number four, behind India, China and Mexico. A new survey tells the tale.
That survey found that 27% of card consumers around the globe have experienced credit card fraud first hand over the past five years. The details, though, are fleshed out once you break the percentages down to each country. Both the U.S. and Mexico come in at around 43%, which is significantly higher than the global average. The survey included 5,000 consumers located in 17 countries. Still, both
To keep it in perspective, Americans, for the purpose of the survey, are considered heavy card users. This means there are more opportunities for fraudsters to manipulate the users. But there’s another important reason, too – and one that ideally will be alleviated in the near future. That reason is we have yet to adopt the safer security measures. Specifically, we’re not using EMV technology. Nearly all of the European countries have begun using this technology, but the U.S. has lagged in making the transition, mostly because merchants find it cost inhibitive.
EMV provides an extra layer of security for consumers which have helped drop the fraud levels down in Europe,
says Mike Braatz, who is the senior vice president of ACI Worldwide.
Those countries that are already using EMV have the lowest rates of fraud. In both the Netherlands and Sweden, their rates of fraud are just 12%. The one thing all countries have in common is that credit card fraud is more rampant than debit card fraud; still though, those numbers are similar in terms of rates of fraud as their credit card counterparts. For instance, 8% of card carriers in the Netherlands report debit card fraud and 37% in both the U.S. and Mexico report fraud associated with their debit cards.
There is one aspect of the survey that’s especially troubling. The number of consumers who have experienced either debit card or credit card fraud more than once is on the rise. In 2011, 8% said they’d been victimized more than once. The latest survey revels a 6% jump in just one year. Now, it’s at 14%.
Currently, the U.S. is slated to begin transitioning to the new technology within the next year, but it’s going to be a slow process and will likely take several years for it to come full circle. The entire financial sector will have to be updated – from banks to the credit card networks to ATMs to the merchant equipment across the country. With so many different companies, including payment processors, it’s bound to be a huge undertaking with plenty of opportunities for bumps in the road.
Mexico seems to provide the most interesting dynamics – the authors of the survey say drug cartels and other organized crime cells account for its rates being so high; plus, they say, the fact that getting into the U.S. is relatively easy, those cities on the American side are often targets for both counterfeit credit cards and even cash. On the flip side, however, Canada has a much lower rate of fraud and it could be the U.S. plays a role in why the rates are at 19%.
Wondering who has the least amount of credit card fraud? Interestingly enough, it’s Germany with just 6% of its consumers reporting debit card fraud.
The CFPB has its own statistics:
It reports 60% of fraud victims know the person who compromised their finances or identity. Not only that, but seniors are the most often targeted age group and have lost close to $2.6 billion due to credit card fraud, identity theft and bank fraud. It encourages consumers to never sign blank documents.
Too many times, we don’t carefully review applications and other mundane paperwork and fraudsters know this. Take a few minutes to ensure all of the blocks are filled in. Also, carefully review your bank statements and credit card statements each month. If anything looks suspicious, treat it as though your identity and account information has been compromised. Contact your card company as soon as possible, as well as your bank, so that safety mechanisms can be put in place to protect your finances.
When you’re filling out checks, never leave the “payable to” blank. And remember that if someone is willing to take advantage of a blank payee, there’s also willing to modify the value of the check. Once that weakness has been exposed, it’s fair game for these thieves who can then sometimes even request and receive a debit card off of your account. Granted, that’s not the preferred method as most criminals simply want to get what they can up front and then bail. Staying on the move means it’s tough for law enforcement to track them down.