Despite the fact that fraud only impacts a fraction of one percent of all purchases made with plastic, according to data from the Federal Reserve, it represents one of the biggest concerns among consumers. This can largely be attributed to the catastrophic impact of the worst-case scenarios that run through people’s minds as well as the notion that regardless of how low the incidence of fraud may be, no one wants to be the exception to the rule and find their hard-earned money siphoned away by criminals.
What consumers generally do not know is that they are shielded from liability for unauthorized transactions made with their credit cards via the combination of federal law issuer/card network policy. As a result, financial institutions and merchants assume responsibility for most of the money lost as a result of fraud. For example, card issuers bore a 88% share of fraudulent losses in 2020 and merchants and ATM acquirers assumed the other 12% of liability, according to the Nilson Report, December 2021.
The following statistics will give you a better sense of the credit card and debit card fraud landscapes as well as how both have changed over the years.
- Global Credit card and debit card fraud resulted in losses amounting to $28.58 billion during 2020. Card issuers and merchants incurred 88% and 12% of those losses, respectively, with the following transaction breakdown:
- Card issuer losses occur mainly at the point of sale from counterfeit cards while merchant losses occur mainly on card-not- present (CNP) when customers buy online or pick up in a store
- During 2020 credit card and debit card gross fraud losses accounted for roughly 6.81₵ per $100 in total volume, up from 6.78₵ per $100 in 2019.
- In 2020, US accounted for 35.83% of the worldwide payment card fraud losses but generated only 22.40% of total volume.
- Over the next 10 years, card industry losses to fraud will collectively amount to $408.50 billion.
(Source: Nilson Report, December 2021)
- Fraud against bank deposit accounts cost the industry $1.3 billion in losses in 2018. Debit card fraud accounted for 44 percent of 2018 losses.
- In addition to the estimated fraud loss amount, banks’ prevention measures stopped another $22.3 billion in fraudulent transactions.
(Source: ABA Deposit Account Fraud Survey, 2019)
Largest Credit Card Data Breaches
| Company | Year | Number of Accounts Affected |
|---|---|---|
| Capital One | 2019 | 106 million |
| Equifax | 2017 | 147 million |
| Lord & Taylor/Saks Fifth Avenue | 2017 | 5 million |
| Orbitz | 2016 | 0.88 million |
| Home Depot | 2014 | 56 million |
| Target | 2013 | 40 million |
| Global Payments | 2012 | 1 million |
| Sony | 2011 | 12 million |
| Heartland Payment Systems | 2009 | 160 million |
| Hannaford Bros. Supermarket Chain | 2008 | 4.2 million (credit & debit) |
| Bank of New York Mellon | 2008 | 12.5 million |
| Heartland Payment Systems | 2008 | 134 million |
| Fidelity National Information Services | 2007 | 3.2 million |
| Certegy | 2007 | 8.5 million |
| U.S. Veterans Affairs | 2006 | 17.5 million |
| TJX Companies, Inc. | 2006 | 94 million |
| Card Systems Solutions | 2005 | 40 million |
| TRW/Sears | 1984 | 90 million |
Online Fraud Losses by Year (U.S. Merchants)
| Year | Fraud as % Cost of Revenue | Cost for Each Dollar of Fraud Losses (in Billions) |
|---|---|---|
| 2019 | 1.86% | $3.13 |
| 2018 | 1.8% | $2.94 |
| 2017 | 1.58% | $2.77 |
| 2016 | 1.47% | $2.4 |
| 2015 | 1.32% | $2.23 |
| 2014 | 0.68% | $3.08 |
| 2013 | 0.51% | $2.79 |
Cost for Each Dollar of Fraud Losses (in Billions)
Annual eCommerce Losses Due to Fraud (All Payment Types)
| Year | Amount (in Billions) |
|---|---|
| 2012 | $3.5 |
| 2011 | $3.4 |
| 2010 | $2.7 |
| 2009 | $3.3 |
| 2008 | $4.0 |
| 2007 | $3.7 |
| 2006 | $3.1 |
| 2005 | $2.8 |
| 2004 | $2.6 |
| 2003 | $1.9 |
| 2002 | $2.1 |
| 2001 | $1.7 |
Issuers’ Profit and Loss Analysis for Debit Card Transactions – Signature vs. PIN ($ Per $1,000 in transactions)
| Info | Signature | PIN | Difference |
|---|---|---|---|
| Revenues | $14.20 | $6.70 | $7.50 |
| Interchange Fees | $14.20 | $6.50 | $7.70 |
| Account Fees | N/A | $0.20 | N/A |
| Costs | $4.50 | $1.10 | $3.40 |
| Network Fees | $1.70 | $0.50 | $1.20 |
| Processing Fees | $0.80 | $0.20 | $0.60 |
| Rewards Programs | $1.20 | $0.00 | $1.20 |
| Fraud | $0.80 | $0.40 | $0.40 |
| Profit Margin to Issuing Banks | $9.70 | $5.60 | $4.10 |
Issuers’ Revenues for Debit Card Transactions
Issuers’ Costs for Debit Card Transactions
Cardholders Impacted by Fraud (by Country)
| Country | Cardholders Affected (Overall) | % Change 2014 - 2016 |
|---|---|---|
| Mexico | 56% | 23% |
| Brazil | 49% | 19% |
| USA | 47% | 6% |
| Australia | 40% | 9% |
| India | 37% | -4% |
| Singapore | 36% | 8% |
| Canada | 35% | 14% |
| South Africa | 33% | 3% |
| France | 29% | 3% |
| UK | 29% | 1% |
| Italy | 27% | 7% |
| Dubai | 27% | -17% |
| Spain | 26% | N/A |
| Indonesia | 26% | 4% |
| Thailand | 23% | N/A |
| New Zealand | 20% | 3% |
| Germany | 18% | 2% |
| Sweden | 14% | 4% |
| Netherlands | 14% | 1% |
| Hungary | 9% | N/A |
Annual Global Fraud Losses (Credit & Debit Cards)
| Year | Amount (in Billions) |
|---|---|
| 2030* | $49.3 |
| 2029* | $47.5 |
| 2028* | $45.5 |
| 2027* | $43.8 |
| 2026* | $41.7 |
| 2025* | $39.9 |
| 2024* | $38.1 |
| 2023* | $36.1 |
| 2022 | $34.4 |
| 2021 | $32.2 |
| 2020 | $28.6 |
| 2019 | $28.7 |
| 2018 | $27.9 |
| 2017 | $24.3 |
| 2016 | $22.8 |
| 2015 | $21.8 |
| 2014 | $16.3 |
| 2013 | $13.7 |
| 2012 | $11.3 |
| 2011 | $9.8 |
| 2010 | $7.6 |
| 2009 | $6.9 |
| 2008 | $6.4 |
| 2007 | $5.5 |
| 2006 | $4.8 |
| 2005 | $4.3 |
| 2004 | $4.2 |
| 2003 | $3.6 |
| 2002 | $3.1 |
| 2001 | $3.1 |
| 2000 | $2.7 |
Annual Global Fraud Losses (in Billions)
Value of credit card frauds reported by US consumers to Consumer Sentinel Network (in millions)
Source: Consumer Sentinel Network, Annual Reports
Best and Worst States regarding Credit Card Frauds Complains reported by US Costumers per 100,000 Inhabitants
| States with Highest Credit Card Frauds Complains | Reports | Info | States with Lowest Credit Card Frauds Complains | Reports |
|---|---|---|---|---|
| Kansas | 1483 | Info | South Dakota | 72 |
| Rhode Island | 1191 | Info | Iowa | 96 |
| Illinois | 1066 | Info | Nebraska | 113 |
| Nevada | 740 | Info | Alaska | 127 |
| Washington | 712 | Info | Kentucky | 127 |
More information about credit card fraud:
