The number of credit card fraud incidents in the U.S. increased 17 percent from January 2011 to September of last year, a new study from FICO shows.
The rate of fraud attempts when the credit card is not present at the time of purchase, such as online transactions, grew 25 percent during the time period. Counterfeit fraud increased by 14 percent.
FICO did not offer a reason for the increase in credit card fraud.
The rate of debit card fraud incidents was unchanged, the study found. Most debit cards require a personal identification number to process a transaction, adding an extra layer of security that credit cards don't typically have.
To increase protections against counterfeit fraud, the payment networks -- Visa, MasterCard, American Express and Discover -- are pushing to make EMV chip cards the standard in the U.S. These cards, which are widely used abroad, contain a microprocessor chip that encrypts the card data and transaction information uniquely each time, making it harder for fraudsters to clone a card.
Information on cards with the traditional magnetic stripe is encrypted once, and can be easily gathered and copied onto counterfeit cards.
The FICO study also found that credit card fraud losses fell 10 percent, despite the increase in fraud attempts. Losses per debit card account also decreased by 3 percent.
Consumers who are victims of credit card fraud are well-protected from losses by federal law. Their maximum liability is $50 and there is no liability if the card account information is stolen, but not the actual card, under the Fair Credit Billing Act.
Debit card users, on the other hand, have fewer protections. Consumers who report a card missing before any unauthorized purchases aren't responsible for any future losses. But if they report a card missing after a fraudulent purchase occurs, their losses vary depending on how much time has passed since the card had been compromised.
Consumers should regularly monitor their purchase history online and contact their card issuer if a suspicious transaction pops up.
Have you been a victim of credit card fraud or debit card fraud? How did you find out? Did you lose any money?
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