Credit-Card Crime Up as Unemployment Climbs
Credit-card crime is soaring to unprecedented levels in the United States, with a 32 percent rise in the amount of fraudulent attempts to buy goods online, by mail order, or by phone in the first half of this year, and a payment fraud prevention company predicts the continuing rise in unemployment and the increasing ingenuity of fraudsters are partly to blame.
Crooks with stolen or cloned cards prefer to use them in situations where the cards do not have to be physically handed over, making e-commerce sites constant–and perfect–targets for scammers.
“In the first six months of 2010, our figures show that attempted ecommerce payment fraud reached an estimated value of $1.14 billion,” said Carl Clump, CEO of Retail Decisions. “We predict this could reach $2.83 billion by the end of the year – increasing by 32 percent compared to the $2.14 billion total recorded in 2009.”
In contrast, the fraud situation seems to be improving in the U.K., where the market is predicted to see a 12 percent decrease this year, thanks to industry initiatives such as chip and PIN and the increasing use of sophisticated fraud-detection tools by retailers and banks.
“This is a stark warning for U.S. merchants and consumers to protect themselves against payment fraud,” Clump said. “Merchants must ensure they have a dynamic fraud-prevention solution in place that can adapt quickly to changes in the way fraudsters operate.”
ReD’s figures indicate that not only are criminals becoming more aggressive, it also seems as if they are targeting increasingly costly items. In the first six months of 2010, the average transaction value for attempted fraud went up by an estimated 34 percent, compared to the same period last year, from $111 to an estimated $149.
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