In 2021, the Federal Trade Commission (FTC) received nearly 390,000 reports of credit card fraud, making it one of the most common types of fraud in the United States. However, this figure does not provide the full picture of the problem.
In December 2022, the Nielsen Report, which oversees the payment industry, released a forecast that the total losses caused by credit card fraud in the United States will reach $165.1 billion in the next 10 years, which means that every age group in every state will be affected. Just one type of credit card fraud — lost card fraud involving online, phone and mail-order transactions — will cost the U.S. an estimated $5.72 billion in 2022, according to Insider Intelligence.
Credit card fraud occurs when someone uses credit card information to make an unauthorized transaction, such as B. buying something on Amazon. In addition to credit card fraud, types of credit card fraud include identity theft and stolen credit cards. As the problem of credit card fraud grows, there are steps you can take to prevent yourself from becoming yet another credit card fraud statistic.
Types of Credit Card Fraud
Credit card fraud happens in many ways. Here are six of the most common types.
- The card does not exist as a scam. Card-not-present fraud occurs when someone uses your credit card information instead of your actual credit card information to complete an unauthorized transaction online, over the phone, or by mail order.
- Identity theft. Identity theft occurs 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 FTC received nearly 1.4 million reports of identity theft.
- Skim. Theft occurs when criminals illegally place devices at ATMs, point-of-sale terminals or gas stations to steal data, including card numbers and PINs. Using this information, scammers can create fake credit or debit cards. Economic losses from skimming are estimated to exceed $1 billion annually.
- Phishing. Phishing allows scammers to steal your information, such as passwords or bank account numbers, via email or text message. Criminals can then gain access to your credit card, bank, and email accounts. They can also sell your information to other scammers.
- Account takeover. Account takeover occurs when cybercriminals use stolen usernames or passwords to take ownership of someone else’s online account. Typically, crooks buy usernames and passwords on the so-called “dark web.”
- Lost or stolen credit cards. If your credit card is lost or stolen, someone else can use it to make unauthorized transactions. You should report a lost or stolen card to the issuing bank as soon as possible.
Credit Card Fraud in the US
According to the FTC, in 2021, credit card fraud is the second most common type of identity theft in the United States, behind only government benefits or document fraud.
In many cases, card issuers, merchants, payment processors and ATM transaction processors suffer financial losses from credit card fraud. Nielsen reports that in 2020, card issuers absorbed 65.4% of losses [PDF], with merchants, ATM acquirers and merchant acquirers accounting for the remaining 34.6%. Acquirers process ATM and merchant transactions.
According to the Nielsen report, neither consumers nor businesses appear to be immune to credit card fraud, as anti-fraud measures are challenged by the “increasingly sophisticated” methods scammers use to commit the fraud. In December 2022, Nielsen reported that total global credit card fraud losses are expected to reach $397.4 billion over the next 10 years, with $165.1 billion of those losses occurring in U.S. attacks
| Year | Amount (In billions) |
|---|---|
| 2021 | 32.34 |
| 2020 | 28.43 |
| 2019 | 28.65 |
| 2018 | 27.86 |
| 2017 | 23.97 |
| 2016 | 22.80 |
| 2015 | 21.84 |
| 2014 | 18.11 |
Year after year, reports of debit card fraud, credit card fraud and related financial losses continue to increase, with 2020 being an outlier. The Nielsen report, which tracks the payments industry, predicts that global losses due to payment card-related fraud will reach $47.22 billion in 2031, including $19.24 trillion in the U.S.
| Year | Credit card fraud reports |
|---|---|
| 2017 | 133,107 |
| 2018 | 157,745 |
| 2019 | 271,938 |
| 2020 | 393,378 |
| 2021 | 389,737 |
Fraud Report by Payment Method
While credit cards were the most reported fraudulent payment method in the U.S. in 2021, they ranked sixth in total dollar losses, according to the U.S. Federal Trade Commission. Bank transfers and payments are the highest reported currency losses in 2021 ($756 million), followed by cryptocurrencies ($750 million).
Losses from credit cards totaled $181 million, more than debit cards ($140 million) but less than gift and prepaid cards ($233 million), the FTC said.
Credit Card Fraud by Age
In 2021, Americans ages 30 to 39 reported the most incidents of credit card fraud: 108,592. That’s one-third of all credit card fraud reports across all age groups.
| Age group | Credit card fraud reports |
|---|---|
| 19 and under | 1,707 |
| 20-29 | 65,269 |
| 30-39 | 108,592 |
| 40-49 | 76,693 |
| 50-59 | 45,741 |
| 60-69 | 21,992 |
| 70-79 | 7,507 |
| 80 and over | 1,954 |
Credit Card Fraud by State
As expected, the number of reports of credit card fraud and financial losses tended to be higher in more populous states and lower in less populous states. But on a per capita basis, Rhode Island topped the FTC’s 2021 identity theft reporting list, followed by Kansas, Illinois, Louisiana and Georgia.
