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Credit Card & Debit Card Fraud Statistics

CH-Statistic-Credit-and-Debit-Card-Fraud-StatisticsDespite the fact that fraud only impacts a fraction of one percent of all purchases made with plastic, according to data from the Federal Reserve, it represents one of the biggest concerns among consumers.  This can largely be attributed to the catastrophic impact of the worst-case scenarios that run through people’s minds as well as the notion that regardless of how low the incidence of fraud may be, no one wants to be the exception to the rule and find their hard-earned money siphoned away by criminals.

What consumers generally do not know is that they are shielded from liability for unauthorized transactions made with their credit cards via the combination of federal law issuer/card network policy.  As a result, financial institutions and merchants assume responsibility for most of the money lost as a result of fraud.  For example, card issuers bore a 63% share of fraudulent losses in 2012 and merchants assumed the other 37% of liability, according to the Nilson Report, August 2013.

The following statistics will give you a better sense of the credit card and debit card fraud landscapes as well as how both have changed over the years.

  • Credit card and debit card fraud resulted in losses amounting to $11.27 billion during 2012. Card issuers and merchants incurred 63% and 37% of those losses, respectively, with the following transactional breakdown:
    • Card issuer losses occur mainly at the point of sale from counterfeit cards while merchant losses occur mainly on card-not- present (CNP) transactions on the Web, at a call center or through mail order.

(Source:  Nilson Report, August 2013)

  • During 2012 credit card and debit card gross fraud losses accounted for roughly 5.22₵ per $100 in total volume, up from 5.07₵ per $100 in 2011.

(Source: Nilson Report, August 2013)

  • In 2012, US accounted for 47.3% of the worldwide payment card fraud losses but generated only 23.5% of total volume.

(Source:  The Nilson Report, August 2013)

  • Retailers incur $580.5 million in debit card fraud losses and spend $6.47 billion annually on credit and debit card fraud prevention annually.

(Source:  PaymentsJournal, Feb. 2012)

  • Financial institutions incurred $955 million in losses due to debit card fraud in 2010 – a 21% increase from the $788 million in losses incurred during 2008.

(Source:  ABA Deposit Account Fraud Survey, 2011)

  • In 2011, 59% of the more than 37 billion debit card transactions that were made were verified by signature, 85% of all fraudulent debit card transactions involved signature “verification,” and $1.15 billion of the total $1.35 billion in debt card fraud losses (85%) stemmed from signature debit card transactions.

(Source:  PaymentsJournal, Feb. 2012)

  • Identity theft is a form of fraud that often results in unauthorized credit card and debit card transactions.  There were 13% more cases of identity theft in 2011 than in 2010, yet the costs incurred by consumers actually represented a 44% decrease over the course of the previous eight years.

(Source:  Javelin Strategy & Research, 2012)

  • 67% more Americans were impacted by financial data breaches in 2012 than in 2010.

(Source:  Javelin Strategy & Research, 2012)

 


Largest Credit Card Data Breaches

Company Year Number of Accounts Affected
CardSystems Solutions 2005 40 million
TJX Companies, Inc. 2006 94 million
U.S. Veterans Affairs 2006 17.5 million
Certegy 2007 8.5 million
Fidelity National Information Services 2007 3.2 million
Heartland Payment Systems 2008 134 million
Bank of New York Mellon 2008 12.5 million
Hannaford Bros. Supermarket Chain 2008 4.2 million (credit & debit)
Sony 2011 12 million
Global Payments 2012 1 million
(Sources:  CSO Online, Feb. 2012; ABC News, June 2010 and July 2013)

Online Fraud Losses by Year (U.S. and Canadian Merchants)

Year % Revenue Lost to Online Fraud Revenue Lost to Online Fraud (in Billions)
2001 3.2% $1.7
2002 2.9% $2.1
2003 1.7% $1.9
2004 1.8% $2.6
2005 1.6% $2.8
2006 1.4% $3.1
2007 1.4% $3.7
2008 1.4% $4.0
2009 1.2% $3.3
2010 0.9% $2.7
2011 1.0% $3.4
2012 0.9% $3.5
(Source:  CyberSource, 2013)
Revenue Lost to Online Fraud (in Billions)
(Source: CyberSource, 2013)

Annual eCommerce Losses Due to Fraud (All Payment Types)

Year Amount (in Billions)
2001 $1.7
2002 $2.1
2003 $1.9
2004 $2.6
2005 $2.8
2006 $3.1
2007 $3.7
2008 $4.0
2009 $3.3
2010 $2.7
2011 $3.4
2012 $3.5
(Source: CyberSource, 2013)

Issuers’ Profit and Loss Analysis for Debit Card Transactions – Signature vs. PIN ($ Per $1,000 in transactions)

Signature PIN Difference
Revenues $14.20 $6.70 $7.50
Interchange Fees $14.20 $6.50 $7.70
Account Fees N/A $0.20 N/A
Costs $4.50 $1.10 $3.40
Network Fees $1.70 $0.50 $1.20
Processing Fees $0.80 $0.20 $0.60
Rewards Programs $1.20 $0.00 $1.20
Fraud $0.80 $0.40 $0.40
Profit Margin to Issuing Banks $9.70 $5.60 $4.10
(Source: Pulse via Food Marketing Institute, 2012)
(Source: Pulse via Food Marketing Institute, 2012)
(Source: Pulse via Food Marketing Institute, 2012)

Cardholders Impacted by Fraud (by Country)

Country Cardholders Affected (Overall) Cardholders Affected (Last 5 Years)
United States 42% 37%
Mexico 44% 37%
United Arab Emirates 36% 33%
United Kingdom 34% 31%
Brazil 33% 30%
Australia 31% 30%
China 36% 27%
India 37% 27%
Singapore 26% 23%
Italy 24% 22%
South Africa 25% 20%
Canada 25% 19%
France 20% 18%
Indonesia 18% 14%
Sweden 12% 11%
Germany 13% 10%
The Netherlands 12% 8%
(Source: ACI Payment Systems, 2012)

Annual Global Fraud Losses (Credit & Debit Cards)

Year Amount (in Billions)
2000 $2.7
2001 $3.1
2002 $3.1
2003 $3.6
2004 $4.2
2005 $4.3
2006 $4.8
2007 $5.5
2008 $6.4
2009 $6.9
2010 $7.6
2011 $9.8
2012 $11.2
(Source: Nilson Report, August 2013)
Annual Global Fraud Losses (in Billions)
(Source: Nilson Report, August 2013)

Value of credit card frauds reported by US consumers to Consumer Sentinel Network(in millions)
*Note: These represent the total amount of credit card frauds reported by US consumers. Values reported by credit card issuers are much larger.
Source: Consumer Sentinel Network, Annual Reports

Best and Worst States regarding Credit Card Frauds Complains reported by US Costumers per 100.000 Inhabitants

States with Highest Credit Card Frauds Complains % States with Lowest Credit Card Frauds Complains %
District of Columbia 58.83% Wyoming 7.63%
Maryland 49.28% Mississippi 8.24%
Florida 46.17% Montana 8.35%
California 38.02% Louisiana 9.34%
New York 36.52% Nebraska 9.37%
Source: Consumer Sentinel Network, Annual Reports

More information about credit card fraud:

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