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FICO Data Shows Fraud Against U.S. Issued Credit Cards Continues to Increase, Led by CNP Fraud

A recent report from FICO found that the incidence rate of credit card fraud on U.S. issued cards increased by 17 percent over a nearly two-year period while card not present fraud grew at the fastest rate.

The FICO study examined the amount of fraud on payment cards issued in the United States from the beginning of 2011 to late 2012. During this time the number of fraud incidents against debit cards stayed relatively constant while fraud incidents against credit cards grew by 17 percent. The increase in card not present fraud grew at an even stronger rate of 25 percent while accounting for 47 percent of all credit card fraud over this time frame. By comparison counterfeit card fraud increased 14 percent. While the eventual EMV adoption in the U.S. will help combat counterfeit card fraud, many expect it to push even more fraud attempts to the CNP channel, which is already highly targeted.

Although the number of credit card fraud incidents increased overall, the average loss per compromised account decreased by 10 percent. The data also showed that the ratio of fraud dollars to non-fraud dollars remained fairly constant, meaning that any increase in dollar fraud losses was proportional to increases in total dollar volume processed on U.S. credit cards. While the dollar volume of credit card fraud losses has increased in-line with total volume and fraudsters have been coming out with 10 percent less per compromised card, the number of compromised cards issued in the United States has increased and use of these cards has been especially high in the CNP channel.

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