Credit card fraud: You have reasons to be fearful

Published November 1st, 2016 - 05:00 GMT
Payment card fraud is only 5 per cent of the revenue of the illegal drug trade, but almost twice as large as illegal arms trafficking. (Shutterstock)
Payment card fraud is only 5 per cent of the revenue of the illegal drug trade, but almost twice as large as illegal arms trafficking. (Shutterstock)

If you’re sometimes scared that someone will make an unauthorised purchase with your credit card, you may have reasons to be so. According to the latest research, card fraud cases are on the rise, reaching Dh80 trillion ($21.84 billion) in just one year.

The figure is the amount of money lost in fraudulent transactions across the globe, including the UAE and the rest of the Middle East in 2015 alone, up 20.6 per cent over 2014. This means that for every $100 worth of card transaction, about 6.97 cents go to the pockets of hackers, imposters and other thieves.

Losses occurred from fake, hacked or stolen cards at automated teller machines (ATMs), in the shops or fraudulent transactions made over the internet, via mail or telephone.  By 2020, financial losses from card fraud worldwide are expected to balloon to $31.67 billion.

“Fraud has worsened every year this decade… It has become a criminal racket that is a source of revenue for organised crime gang and terrorists,” said the latest edition of The Nilson Report.

Payment card fraud is only 5 per cent of the revenue of the illegal drug trade, but almost twice as large as illegal arms trafficking.”

Card fraud has been a growing global problem. According to ACI Worldwide’s recent poll involving 6,000 consumers across 20 countries, about a third of consumers have experienced card fraud in the past five years.

The majority of the countries (14 out of the 17 surveyed) reported an increase in card fraud between 2014 and 2016. In 2014, the UAE, as well as China, India and the United States topped the list, but this year, Mexico leads the way, with 56 per cent of the consumers experiencing card fraud.

“Card fraud remains an issue of deep concern for consumers around the globe,” said Andreas Suma, vice president and global lead, fraud and data, ACI Worldwide. “It’s no surprise that there is a direct correlation between fraud and lower consumer trust and card loyalty.”

According to The Nilson report, a huge portion of the money stolen by fraudsters, estimated to be around $19.58 billion in 2015, was linked to international card brands. Cards that are considered “global general purpose brands” include MasterCard, Visa, American Express, Diners Club and UnionPay.

However, while fraudsters victimised cardholders, the financial losses have been shouldered by the card-issuing company, banks and merchants, according to Nilson.

By Cleofe Maceda
 

© Al Nisr Publishing LLC 2019. All rights reserved.

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