Credit-Card Fraud Keeps Rising
Credit-Card Fraud Keeps Rising, Despite New Security Chips—Study
From “Credit-Card Fraud Keeps Rising, Despite New Security Chips—Study”
Wall Street Journal (02/02/17) Andriotis, AnnaMaria; Rudegeair, Peter
A new report from consulting firm Javelin Strategy & Research and identity-theft-protection firm LifeLock Inc. finds that more consumers became victims of identity fraud last year than at any point in more than a decade despite new security protections implemented by the credit-card industry. Approximately 15.4 million U.S. consumers were victims of identity fraud in 2016, resulting in $16 billion in total losses, according to the report. The number of victims rose 18 percent from 2015 and was the highest since Javelin, a unit of Greenwich Associates LLC, started tracking the phenomenon in 2003.
The rise in identity fraud was driven in part by a 15 percent increase in cases of fraudulent online purchases, the study noted. That activity led to “existing-card” fraud, which involves criminals counterfeiting debit and credit cards already held by customers, reaching a new peak. Major increases also occurred in rarer frauds that have been steadily rising in recent years and that are harder for consumers and lenders to detect. The incidence of new-account fraud, for example, in which new accounts are opened in consumers’ names without their knowledge or knowledge by the lender, rose 40 percent to 1.8 million. The increases happened despite the rollout of tougher security measures around debit and credit cards over the past couple of years. Most major card issuers in the United States have replaced consumers’ magnetic stripe cards with chip cards, and merchants have increasingly shifted to more secure payment terminals.