February 7, 2017
Two million more U.S. consumers were victims of identity fraud in 2016 compared to the year before and card-not-present businesses bore the brunt of the record level of illegal activity, according to a new report. In its 2017 Identity Fraud Study, Javelin Strategy & Research found card-not-present fraud rose by 40 percent and account takeover fraud increased a staggering 61 percent in the past year. Both types of fraud were driven by the EMV migration in the U.S. making in-store fraud more difficult and, consequently, other options for leveraging stolen information online more attractive.
“After five years of relatively small growth or even decreases in fraud, this year’s findings drives home that fraudsters never rest and when one area is closed, they adapt and find new approaches,” said Al Pascual, senior vice president, research director and head of fraud & security for Javelin Strategy & Research. “The rise of information available via data breaches is particularly troublesome for the industry and a boon for fraudsters. To successfully fight fraudsters, the industry needs to close security gaps and continue to improve and consumers must be proactive too.”
In addition to CNP fraud and account takeover fraud on existing cards, Javelin identified new account fraud—both online and offline—as a burgeoning trend and said victims of this type of fraud were more likely than other types to notice the theft only after a review of their credit report or when contacted by a debt collector. Regular e- and m-commerce shoppers, on the other hand, were more likely than others to be victims of fraud, Javelin said, but were also quicker to identify it. Seventy-eight percent of fraud victims in this category detected fraud within one week of it beginning.