Credit card fraud is on the rise.
Let’s look at some important bullets:
- 2014 credit card fraud was $16.3 Billion (with a B)
- Credit Card fraud (19%) outpaced the growth of credit cards (15%).
- US fraud loss was 12 ¾ c for every $100.
- Rest of the world fraud loss was 3 ¾ c per $100.
- Estimates are that it will average $30 Billion per year over the next 6 years, by which time it would have more than doubled today’s figures to $35 Billion.
- Banks / investigators estimate that is will decrease after 2020. I predict that it will not, especially with the Asian market still very much in growth/expansion mode. It will not slow down unless all credit card business stops – which will not happen.
- New protective technology is introduced every year, but the fraudsters are often out-running the protectors.
Two points are important to note:
- It sounds small – until you are the victim.
- I hesitate to say that this is the full figure, since organizations and individuals may in fact hide some of the cases – for obvious reasons.
Let me summarize 5 of my own cases:
- 24 Dec 1973: Amex card stolen. Before the card was stopped I had lost a whole month’s salary. In 1974 things were different than today. It cost me
- 2003: Received a call one Sunday morning informing that my card had been compromised in another country. I lost no money and my replacement card was with me within a week.
- 2008: It took me 3 years to get an internet provider to stop billing me for services I terminated when I moved to another country. I had my bank behind me and we disputed it every month until we won the argument.
- 2010: My card was compromised in another country (with a fraudulent card – something I will expand on more later) by someone buying first 4, then 2, then 1 airline tickets which he sold to people for trips between Australia and NZ. I was in Singapore at the time, and could prove it – luckily.
- 2012: I made a one-time payment from Singapore to a company in the US, which they subsequently auto-renewed without my knowledge (or warning) and I ended up losing my credit card. I got most of my money back. But losing the card is what hurt – to some degree. This is something I will touch on again later – and the way that you can overcome it.
Notice the Pattern?
It took 30 years from case 1 to case 2. Then it picked up speed and now repeats every 2 years.
And it is not just fraud but blatant money-grabbing and the card-holder has very few ways to fight back except for inconveniencing him/her-self.
Cases is known where 3-star generals were caught with 2,500 blanks which they were busy turning into fraudulent cards which were for sale at USD2,000 but with $10,000 loaded. That is aside from having been caught with the Reserve Bank signatures for printing false notes – which has not been configured into the $16.3B fraud.
Just One of the Frauds
Credit card fraud is just one way to become a victim. Other fraud activities include:
- Cloning / phishing / skimming at ATM’s and other sites.
- Account take-over (often via changing the victim’s address details – physical and or email.
- Card users themselves also “clean out” their cards and then run away.
- “Friendly fraud” perpetrated by someone whom the victim knows. These are often not reported due to people trying to protect relationships / family. However, these cases are starting to appear with regularity on some current affairs programs.
How to Fight Back
I spoke with my bank representative two days ago who informed me that she herself is now fighting 2 cases of fraud involving her credit card number. She has settled one so far.
- Keep you card in a safe place (on your person is one way, depending on your movements and location). In fact, check your cards from time to time.
- Study your statements every month.
- Report any breach or loss of a card immediately.
- Gather supportive information to prove where you had been at the time. In my case it was my passport that came to the rescue.
- Do not give up, even if the bank seems to tread water (which was in my instance number 4 above. I eventually made enough public noise that my case was taken into a private office and settled but not after I was threatened with them calling the police – which I said I would welcome).
- Think very hard who you give your credit card details to, especially in today’s internet shopping world. I spoke to my lawyer yesterday and her response was “giving your credit card number to someone (person or company) is like giving them a signed cheque” to which I would like to add “several signed blank cheques”.
- Whatever you buy / when you eat out, and pay for by credit card, check the relevant paperwork before leaving the queue. Years ago, when cards were still imprinted, I used to follow the person to the pay point and forced them to do the imprint in front of me – also taking with me all “bad imprints”. I never left them behind since there was a market for those.
There are more ways to protect yourself – some of which will be covered in an upcoming book – but it causes some inconvenience to yourself.