Credit Card Fraud Statistics

In 2021, the Federal Trade Commission (FTC) fielded nearly 390,000 reports of credit card fraud, making it one of the most common kinds of fraud in the U.S. But that figure doesn’t begin to offer a complete view of the problem.

In December 2022, the Nilson Report, which monitors the payments industry, released a forecast indicating that U.S. losses from card fraud will total $165.1 billion over the next 10 years, plaguing every age group in every state. Just one type of credit card fraud — card-not-present fraud, which involves online, over-the-phone and mail-order transactions — accounted for an estimated $5.72 billion in U.S. losses in 2022, according to Insider Intelligence.

Credit card fraud happens when someone uses credit card information to make unauthorized transactions, such as buying merchandise on Amazon. Aside from card-not-present fraud, types of credit card fraud include identity theft and stolen credit cards. While the problem of credit card fraud looms large, you can take steps to prevent becoming another credit card fraud statistic.

Bankrate Insight

Types of credit card fraud

Credit card fraud occurs in a variety of ways. Here are six of the most common types.

• Card-not-present fraud. Card-not-present fraud happens when someone uses your credit card information, but not your actual card, to carry out an unauthorized transaction online, over the phone or by mail order.
• Identity theft. Identity theft takes place when someone uses your personal information, such as your Social Security number or credit card number, to commit fraud or other crimes. In 2021, the Federal Trade Commission received nearly 1.4 million reports of identity theft.
• Skimming. Skimming happens when criminals illegally place devices on ATMs, point-of-sale terminals or gas pumps to steal data, including card numbers and PINs. With this information, crooks can generate phony credit or debit cards. Financial losses from skimming are estimated to be more than $1 billion each year.
• Phishing. Phishing enables fraudsters to steal your information, such as passwords or account numbers, through emails or text messages. Criminals can then gain access to your credit card, bank and email accounts. They also might sell your information to other crooks.
• Account takeover. Account takeover occurs when a cybercriminal assumes ownership of someone else’s online account with a stolen username or password. Generally, crooks buy usernames and passwords on the so-called “dark web.”
• Lost or stolen credit cards. If you lose your credit card or it’s stolen, someone else may use it to make unauthorized transactions. You should report a lost or stolen card to the card issuer as soon as possible.

Credit card fraud in the United States

In 2021, credit card fraud ranked as the second most common type of identity theft in the U.S., behind fraud involving government benefits or documents, according to the FTC.

In many cases, card issuers, merchants, payment processors and ATM transaction processors eat financial losses attributed to credit card fraud. In 2020, card issuers assumed 65.4 percent of the losses [PDF], with merchants, ATM acquirers and merchant acquirers accounting for the remaining 34.6 percent, the Nilson Report says. Acquirers process ATM and merchant transactions.

Neither consumers nor businesses seem to be able to escape credit card fraud, as fraud-fighting measures have been challenged by “ever more sophisticated” ways that crooks commit fraud, according to the Nilson Report. In December 2022, the Nilson Report said it expects global losses from card fraud to total $397.4 billion over the next 10 years, with $165.1 billion of those losses happening in the U.S.

Year after year, reports of debit card fraud, credit card fraud and associated financial losses continue to climb, with the pandemic year of 2020 being an outlier. The Nilson Report, which tracks the payments industry, predicts global fraud losses related to payment cards will reach $47.22 billion in 2031, including $19.24 trillion in the U.S.

Fraud reports by payment method

Although credit cards represented the most U.S. fraud reports by payment method in 2021, they ranked sixth for total dollar loss, according to the FTC. Bank transfers and payments accounted for the highest monetary losses reported in 2021 ($756 million), followed by cryptocurrency ($750 million).

Losses attributed to credit cards totaled $181 million, above debit cards ($140 million) but below gift cards and reload cards ($233 million), the FTC says.

Credit card fraud by age

In 2021, Americans ages 30 to 39 reported the most incidents of credit card fraud: 108,592. That represents one-third of credit card fraud reports among all age groups.

Credit card fraud by state

As you’d expect, the number of credit card fraud reports and financial losses tends to be higher in states with a larger population and lower in states with a smaller population. But on a per capita basis, Rhode Island topped the FTC’s list for identity theft reports in 2021, followed by Kansas, Illinois, Louisiana and Georgia.

Credit card fraud statistics by state

How to protect yourself from credit card fraud

While it might seem impossible to protect yourself from credit card fraud, it can be done. Here are 12 tips for preventing fraudsters from causing financial harm.

• Make it a habit to regularly check your credit reports. Watch for any suspicious activity.
• Frequently review your bank statements and credit card statements. Comb through them to spot unauthorized transactions.
• Don’t use public Wi-Fi to complete financial transactions.
• Consider setting up a credit freeze, which restricts access to your credit reports.
• If you’ve been the victim of credit card fraud, place a fraud alert on your credit reports.
• Shred documents that include personal information, such as a credit card number or Social Security number.
• Don’t provide credit card information over the phone unless you initiated the call.
• Verify that a website is secure before transacting business or entering personal information by looking for URLs that start with https:// at the top of your web browser.
• Create hard-to-guess passwords for your online accounts.
• Use multi-factor authentication (MFA), which requires at least two ways (such as a PIN and a fingerprint) to verify your identity before you can log in to an online account.
• Install antivirus software and other technology to boost the security of your electronic devices.
• Consider a digital wallet, which enables you to use your smartphone for credit card transactions rather than a physical card.

This article originally appeared here and was republished with permission.