Despite new tech chips in credit cards, fraud jumps 33%

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April 20, 2017 by Paul Dughi

credit card

I got that call on the weekend.   Somebody had used our credit card to try to book an Uber ride.  Since we hadn’t left the house that morning, I knew it wasn’t a legitimate charge.  I’m happy the folks at Chase knew it wasn’t right and called.

One of the things that tipped them off was an unusual pattern.  First they did an “inquiry” into the card number through an obscure website but didn’t charge anything.  Next, they tried a small charge of 38 cents.  That went through.  Knowing the card was active, they tried to book Uber trips – repeatedly.

Credit card fraud happens at an alarming rate.  Experian, the credit monitoring agency, analyzed millions of e-commerce transactions and ranked the top states, cities, and Zips for fraud.  You can check where your city/state showed or view an interactive fraud map of the US here.

The data reveals that the fraud attack rates in Delaware, Oregon, and Florida were the top-ranked states for billing and shipping e-commerce fraud in 2016 when you match up fraudulent transactions against the number of transactions in total.

Both Oregon and Delaware saw an increase in e-commerce billing fraud attacks of over 200 percent.

Three states, Florida, California and New York, accounted for more than 70 percent of total e-commerce billing fraud attacks.

The reason is… surprising to say the least

You know those cards that have chips in them and you plug them into the machine instead of swiping them?  They’re call EMV terminals.  While they’ve cut down on credit card fraud from the terminals, Experian thinks they are also the reason why fraud has jumped 33% in the past year.

“One of the major drivers for the increase in fraud attacks is the continued adoption of EMV terminals for chip-and-pin credit cards. While these cards reduced counterfeit credit card fraud at the point-of-sale, they have driven fraudsters online. This pattern is similar to what other EMV markets saw when transitioning to chip-and-pin cards,” said Adam Fingersh, Experian general manager and senior vice president of Fraud and Identity Solutions.

“As more compromised data becomes available from breaches, it’s easier for fraudsters to get their hands on identity data requiring consumers and businesses to stay diligent in protecting themselves.”

 

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