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Consumers lost over $16 billion from identity theft and fraud in 2016, while card issuers and merchants lost $22.8 billion.
- The Nilson Report, October 2016

Credit card fraud is a broad–based term used to describe theft and fraud committed using a credit card or any similar payment mechanism 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. Credit card fraud is closely related to identity theft and can be tied to stolen credit cards, fraudulent credit cards, or even fake credit cards.

According to the Lexis–Nexis™ “Total Cost of Fraud” survey conducted in 2009, credit cards are linked to nearly half of all fraudulent merchant transactions, and 50% of large retailers saw an upsurge in credit card fraud in 2008. The report goes on further, to say:

“Merchants are losing $100 billion due to unauthorized transactions and fees/interest associated with chargebacks. This is nearly ten times the amount suffered by financial institutions, and more than 20 times the out–of–pocket cost borne by consumer fraud victims. Factoring in the additional cost of covering lost/stolen goods, merchants are actually suffering a massive loss of $191 billion from retail fraud each year, with a three–pronged cost of customer reimbursement, replacing merchandise, and paying fees to banks.”
“Fraudsters and thieves are getting smarter. Now more than ever we need to stay one step ahead of the criminals”. Visa Chief Executive Officer Joseph Saunders
Hand–held “skimmers” make it easy to steal customer data embedded in the magnetic stripe on the back of a credit card, says Brian Murphy, assistant special agent in charge of the U.S. Secret Service’s criminal investigative division.
- Bloomberg “Wells Fargo Card Executive Stung by Fraud, Visa Helps” March 23, 2010 -

With financial institutions absorbing $11B in card related fraud and consumers another $5B, the total cost of card fraud in 2009 in the United States was nearly $210 Billion.

Credit card information can be compromised during each phase of the process of issuing and using credit cards; from card manufacturing, through the customer application process, delivering the card to the customer, ongoing management of the card account, at the merchant location where the card is used and from the processor network, which presents the card information and moves funds. At each phase, the criminal element continues to become more creative and efficient at obtaining and/or controlling credit card account information. Application fraud, account takeovers, card skimming, carding, BIN attacks and hacking into secure networks are just some of the techniques used.

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Even though credit card fraud is on the rise, there are things that you can do to protect yourself.

FraudFighter’s fraud prevention solutions help empower businesses to streamline their workflow while optimizing their compliance initiatives with regard to the stringent regulatory guidelines for record–keeping and reporting of certain types of financial transactions. FraudFighter™ provides a selection of fraud prevention solutions that allow organizations to seamlessly implement multiple layers of fraud protection to secure themselves against a variety of different fraud activities, including credit card fraud. Each job site has unique security needs and depending on credit card volumes, industry & channel types, average size of transaction and number of transaction locations, Fraud Fighter solutions are tailored to apply an appropriate set of layers of protection in order to achieve loss avoidance across all customer channels.


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