Credit Card Fraud is Expensive For America

By Michael Germanovsky Globally, the amount of money being lost as a result of credit card fraud is declining against the amount consumers are putting on their plastic. The huffingtonpost.com reported that recently-released data from the Nilson Report revealed in 2010, 4.46 cents was lost per every $100-worth of debit and credit card transactions. This is down from the 2009 figure of 4.71 cents per $100. However, the United States has little to feel good about as the majority of security gains came from European and Asian banks. By issuing cards that contain computerized chips which aid in the verification of purchases, banks overseas managed to tighten up their card security and effectively combat fraud as indicated by the numbers. Nilson Report publisher David Robertson said in an interview, "We have a disproportionate percentage of the global total, and a considerable part of that is because we have an old infrastructure. The U.S. will account for a steadily rising share of the global total until it embraces chip-based card security," according to huffingtonpost.com. The amount of fraud-related losses worldwide totaled $7.6 billion last year which is ten percent higher than in 2009, Robertson's Nilson report discovered. Fraud occurring in America accounted for 47% of that amount. Banks in European countries as well as elsewhere utilize “chip-and-pin” card systems that make cards much more difficult for thieves to counterfeit. Cards that instead have data loaded onto a magnetic strip - such as they kind widely used within the U.S. - are more susceptible to being faked. The news is rife with such stories. There was a recent report out of Lake Havaseu, AZ, that arrests have been made of three individuals suspected to be involved in a credit card skimming ring that spanned Southern California and Phoenix. “During investigations, more than five skimmers were recovered,” said Lake Havasu City Police Sgt. Joe Harrold to the havasunews.com. In Boulder, CO, police are currently searching for the man who is believed to have “skimmed” a bank customer's card information at an ATM and then withdrew $11,000 from her account. According to authorities, the same suspect is thought to have perpetrated several other skimming crimes throughout the Denver metro area against multiple victims and stealing more than $100,000 in total. Anyone looking to apply for a credit card should be careful how they use it after receiving it in the mail from their card issuer by always being on the lookout for scammers. Nilson Report findings show global card losses on the rise for nearly every single year since 1994, during which, as record indicate, approximately $1 billion was lost as a result of fraudulent card use. 2010's fraud losses were $7.6 billion. The overall reduction in the fraud rate can be attributed to the fact that over all card use by consumers has risen. Last year's losses represent only a small fraction of the $17 trillion in transactions consumers made using plastic as their method of payment.