PAYMENT CARD FRAUD RUNS RAMPANT IN THE U.S.Financial institutions are losing lose billions of dollars thanks to the growing epidemic.
Criminals who once made a living selling narcotics and handling stolen goods have discovered that stealing credit cards and laundering money with prepaid cards is an easier, more lucrative and lower risk business. More than half of the payment cards confiscated by law enforcement and processed by ERAD™ are stolen credit and debit cards.
Last year, nearly 32 million credit cards were stolen in the U.S. and 13 million individuals were victims of identity theft. In 2017, issuers will lose an estimated $25 billion tied to stolen credit and debit cards. That amount is expected to double by 2020, as criminal activity grows from both face-to-face and online purchase activities.
EMV (Europay, MasterCard and Visa) chip-equipped cards are not the fraud-reduction silver bullet that issuers anticipated. Add to that more than $40 billion laundered on prepaid cards from human smuggling, sex trafficking, narcotics sales, identity theft, tax fraud and terrorist funding, and it’s easy to see why – and how often – criminals take advantage of payment cards.
Every day, law enforcement agents around the country confiscate plastic cards. Some are recognizable retail store gift cards; others are legitimate looking credit and debit cards; and still others are harmless-looking hotel room keys and identity cards. However, when it comes to plastic cards, what you see isn’t always what you get. As it turns out, a large portion of these cards are being used to launder money tied to illegal or illicit activities.
Criminals skim card information from unknowing financial institution consumers or buy stolen credit and debit card numbers on the Dark Web. They then transfer them to other plastic cards. This makes detection and interrogation nearly impossible.
The longer it takes for a financial institution to discover an account has been compromised, the more exposed that organization becomes. With average cloned card losses estimated at $3,500 per card, it doesn’t take many stolen cards to chip away at your bottom line.
Early detection and reporting is a key strategy to reduce your institution’s stolen card fraud losses and improve cardholder satisfaction.
Payment card theft and fraud is running rampant across the nation, with nearly 32 million credit cards stolen in the U.S. last year and more than $40 billion laundered on prepaid cards.
By 2020, financial institutions will lose as much as $50 billion tied to stolen credit and debit cards.
Chip cards have not helped to curtail this fraud outbreak. The number of payment cards compromised at U.S. ATMs and merchants actually increased by 70% last year.
In the midst of this fraud epidemic, financial institutions are struggling to protect their customers, their bottom lines and their reputations.
IRS, Last Updated August 3, 2017 The following examples of Identity Theft Investigations are written from public record documents on file in the courts within the judicial district where the cases ...
“Illegitimate cards:” Officials recover bundle of 1,300 gift cards; 700+ bought with stolen information
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