22 Credit Card Fraud Statistics to Know for 2023
Were you the victim of fraud in the last year? If so, you weren’t alone. Not by a long shot.
According to recent data from the Nilson Report, the amount of money lost to card-not-present fraud in 2020 was six times greater than what merchants lost just one year earlier. That wasn’t just a fluke either, as 2019’s numbers were already four times greater than 2018.
It’s not just counterfeit cards we need to worry about. In fact, more and more fraudsters are choosing to bypass physical cards altogether.
Contemporary fraudsters are using highly sophisticated scams to obtain detailed personal information from cardholders. They then use that information to hijack existing accounts, or create new accounts for people who don’t exist. This is what we call card-not-present, or eCommerce fraud.
Both consumers and merchants get hurt when criminals shop with stolen information. But just how serious is the threat, really? Let’s examine five other key questions, backed by some startling credit card fraud statistics. Then, you can judge for yourself.
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#1. How Big is the Fraud Problem?
Reports show that, globally, the number of digital transactions suspected to be fraud attempts rose 46% YoY in 2021. While the problem is global in scope, the US is the source of more than one-third of card fraud losses.
- eCommerce merchants in the US reported a 140% increase in fraud attacks since 2020. (source: LexisNexis)
- Roughly three-quarters of merchants who tracked criminal fraud trends noted an average increase in fraud incidents of more than 20% between 2018 and 2021. (source: 2021 Chargeback Field Report)
- US retailers see an average of 1,740 fraud attempts each month. Just over 50% of these attempts are successful. This makes 2021 the first year in which successful fraud attempts outnumbered failed attempts. (source: Creditcards.com)
- 7-10% of the US adult population fall victim to identity theft every year. As many as 80% of the US credit cards currently in circulation have been compromised. (source: DefineFinancial)
#2. How Much Does Fraud Really Cost?
There are a variety of indirect long- and short-term costs from fraud. However, the most obvious metric is the direct financial impact that fraud attacks have. Current online credit card fraud statistics paint a sobering picture of the threat currently facing businesses.
- Direct losses by merchants and banks exceeded $28.58 billion globally in 2020. (source: Nilson Report)
- The US posted $11 billion in credit card fraud losses in 2020. Using the LexisNexis™ True Cost of Fraud Multiplier, that $11 billion in fraud would result in an actual real-life loss of $39.6 billion. (source: Hospitality Tech)
- Global payment fraud has more than tripled in the last decade, from $9.84 billion in 2011 to $32.39 billion in 2021. (source: Spend Journal)
- Card fraud over the next decade is expected to cost the industry a collective $408.50 billion in global losses. (source: Nilson Report)
- Global losses from credit card fraud will top $43 billion within five years. (source: Nilson Report)
#3. What Are the Most Common Forms of Fraud?
Credit card fraud involves making purchases with stolen account data. However, there are many different ways to accomplish this. Here are some of the more common types of scams we’ve been seeing.
- Identity theft was the most common type of fraud reported in 2020, with over 1.3 million reports. Identity theft accounted for 29.4% of all fraud reports in 2020. (source: CreditRepair.com)
- Fraud on existing credit card accounts also remains high, with over 33,800 cases reported in 2020. (source: Credit Repair)
- Americans lost $80 million from cryptocurrency scams between October 2020 and March 2021. That’s a 1,000% increase in just 6 months. (source: ConsumerAffairs)
eCommerce, Fraud & Chargebacks in the Age of COVID-19
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#4. Where Do Fraudsters Get Stolen Data?
Fraud is not a new problem, but where are modern fraudsters getting the data to pull off their scams?
Phishing is still widely used to capture information from individuals. Phishing attacks nearly doubled between 2019 and 2020. It has been surpassed as the top threat source, though. Card-testing was the most common fraud tactic globally in 2021.
The dark web is still a cheap, unregulated source of data. Hackers may not commit the actual fraud, but by selling information they’ve stolen through data breaches, they directly enable the process.
- 1,108 intentional data breaches (the deliberate hacking of a database to steal information) occurred in 2020. (source: Define Financial)
- More data breaches from cyber-attacks occurred in the first three quarters of 2021 than in all of 2020. (source: ITRC)
- More than 1.6 billion consumer records were compromised between January 1, 2005, and August 31, 2019. In other words, roughly one-fifth of the current global population has had a record compromised. (source: ZD Net)
- Fraudsters pay less than $5 for the average payment card account record, including a CVV number. The average record including the victim’s name, Social Security number, and date of birth, is just over $100. (source: CardRates.com)
- Almost one-fifth (18%) of all identity theft committed against minors in 2020 was perpetrated by a parent or other relative. (Card Rates)
#5. Are Cardholders Ever at Fault?
Cardholders can be victims of criminal activity. However, they can also play a role in perpetuating this problem. Cardholders can hurt merchants in a few different ways. They can abuse the return process, or they can engage in practices like chargeback abuse and cyber shoplifting.
Despite these telling credit card fraud stats, consumers continue to dodge the blame.
- Consumers returned an estimated $428 billion in merchandise to retailers in 2020. Roughly 6% of this amount—$25.3 billion—was the result of return fraud. (source: Chargebacks911)
- One-third of consumers committed friendly fraud in 2020 by claiming a product was bad or had not arrived. 4 in 10 consumers asked for a refund, despite knowing no fraud had been committed. (Chargebacks911)
- 48% of consumers feel that online brands are responsible for protecting customers from fraud and identity theft. (source: Paypers)
- 32% of consumers feel that banks and credit card companies should bear the burden of fraud protection. (source: Paypers)
- Fewer than one in five cardholders (18%) believe that fraud protection is their own responsibility. (source: Paypers)
The Key Takeaway: You’re Not Alone.
It doesn’t matter if you’re the victim of criminal attacks or cardholder abuse. The end result: more chargebacks, lost revenue, and threats to your business.
Chargebacks911® are the industry’s leading experts in chargeback management and mitigation. We offer innovative technologies and highly-customizable strategies designed to help you detect and resolve issues before they turn to chargebacks.
Don’t become another statistic. Contact us today to learn more about our risk-free fraud solutions.