As we use cash less and less, it’s no surprise that credit card fraud incidents are happening more frequently. How many people are actually affected? Can we protect ourselves?
Credit Card Fraud Statistics
- Americans victimized by:
- Credit card fraud – 10%
- ATM/Debit Fraud – 7%
- Median amount stolen – $399
- Amount of fraud related to credit cards – 40%
- Amount of credit card fraud worldwide – $5.55 bil
Credit Card Fraud by Type
- Counterfeit cards – 37%
- Lost or stolen – 23%
- No-Card (ie giving info to fake telemarketers) – 10%
- Stolen during mail fraud – 7%
- Identity theft – 4%
Initial Point of Contact
- Email – 48%
- Internet – 12%
- Telephone – 10%
- Other – 17%
States With The Lowest Rate of Fraud
- New Hampshire
States With The Lowest Rate of Fraud
- South Dakota
- North Dakota
Global Breach Incidents by Source
- Malicious outsiders – 58%
- Accidental loss – 24%
- State Sponsored – 2%
- Malicious insiders – 14%
- Hacktivist – 2%
- Other – < 1%
Global Breach Incidents by Type
- Identity theft – 53%
- Financial access – 22%
- Account access – 11%
- Existential data – 10%
- Nuisance – 4%
Breaches by Industry
- Government – 43%
- Healthcare – 19%
- Other – 17%
- Technology – 12%
- Retail – 6%
- Education 3%
- Financial – < 1%
Fraud Complaints by Age
- 20 – 29 – 19%
- 30 to 39 – 22%
- 40 – 49 – 25%
- 50 – 59 – 25%
- 60 + – 10%
Top Credit Card Breaches
- When: 2008
- Affected: 130 million customers
- Cost: $110 million
- When: 2005
- Affected: 94 million customers
- When: 1984
- Affected: 90 million customers
- When: 2011
- Affected: 77 million customers
- When: 2013
- Affected: 40 million customers
- Cost: $146 million + CEO fired
Consumer Fraud in the United States
A look at the rates of fraud in America by the number incidents, products and demographics
Have you ever bought a revolutionary weight-loss product only to put on 5 pounds while using it? Maybe you signed up for a work-from-home opportunity that would allow you to make $5,000 or more every month, only to receive a list of job ads printed from a craigslist.com site? If you fell victim to either of these cons, or to any of the millions of other scams conducted across the United States last year, don’t feel bad. You’re not alone.
Far from it, actually. In the following article we will look at consumer fraud in the United States and what's being done to protect consumers.
U.S. Consumer Fraud
Scamming U.S. consumers is big business for a lot of people. Just look at how famous the website FreeCreditReport.com has become: We all know those floppy-haired band mates singing about the financial woes they’ve suffered because they never did order their free credit reports. Turns out, those singers may be cute, but they’re not exactly honest. Several state agencies are suing FreeCreditReport.com because the “free” credit reports only come when consumers sign up for a decidedly not-free credit-monitoring service, proving that scams aren’t only run by shady characters hovering in front of computer screens in darkened basements.
FTC Fighting Fraud
The Federal Trade Commission recently released its annual list of the top types of consumer fraud complaints in the United States. Topping the list, to no one’s surprise, was the category of weight-loss products. The FTC registered more than 8 million cases of consumer fraud stemming from weight-loss products that didn’t work as advertised. No wonder Americans keep getting heavier!
Coming in second was the category of business opportunity scams. These largely take the form of work-from-home and MLM “opportunities” that amount to nothing. The FTC says U.S. consumers were the victim of more than 6 million business opportunity scams in 2009. Rounding out the top five were buyers’ club, foreign lottery and credit-card insurance scams.
Who Are The Victims?
The lesson here? Don’t trust most of what you see on the Internet. All of these scams are made infinitely easier by the power of the Internet. It makes you wonder how the hard-working scam artists of the world ever survived without the web. There’s another lesson from the FTC, too: It isn’t just the elderly or the young being scammed. It’s everyone.
The FTC reported that people over the age of 75 made up 5.6 percent of the consumer-fraud cases last year. People 65-74 made up 10.4 percent of all cases, while those in the 55-64 range and 45-54 range made up 11 percent and 14.6 percent, respectively.
American Trust: Wall Street Reform and Consumer Protection Act
America paid too high of a price for the greedy behavior of Wall Street. Eight years of Wall Street pursuing short-term profits – at any cost – was largely responsible for the eight million jobs and $17 trillion in retirement savings and personal investments Americans have lost. This is far too steep a price to pay for Wall Street's misdeeds. Throughout the recent financial crisis, the various institutions that make up the financial world have all been hit in one way or another for not being there for their customers. It's no surprise then very few Americans say they find statements completely believable if made by a spokesperson for one of these types of companies.
Will the new Wall Street Reform Act help American’s regain lost trust? Here are the details:
Consumer Protections with Authority and Independence:
Creates a new independent watchdog, housed at the Federal Reserve, with the authority to ensure American consumers get the clear, accurate information they need to shop for mortgages, credit cards and other financial products, and protect them from hidden fees, abusive terms and deceptive practices.
Ends Too Big to Fail Bailouts:
Ends the possibility that taxpayers will be asked to write a check to bail out financial firms that threaten the economy by: creating a safe way to liquidate failed financial firms imposing tough new capital and leverage requirements that make it undesirable to get too big; updating the Feds authority to allow system-wide support but no longer prop up individual firms; and establishing rigorous standards and supervision to protect the economy and American consumers, investors and businesses.
Advance Warning System:
Creates a council to identify and address systemic risks posed by large, complex companies, products, and activities before they threaten the stability of the economy.
Transparency &Accountability for Exotic Instruments:
Eliminates loopholes that allow risky and abusive practices to go on unnoticed and unregulated – including loopholes for over-the-counter derivatives, asset- backed securities, hedge funds, mortgage brokers and payday lenders.
Federal Bank Supervision:
Streamlines bank supervision to create clarity and accountability. Protects the dual banking system that supports community banks.
Executive Compensation and Corporate Governance:
Provides shareholders with a say on pay and corporate affairs with a non-binding vote on executive compensation.
Provides tough new rules for transparency and accountability for credit rating agencies to protect investors and businesses.
Enforces Regulations on the Books:
Strengthens oversight and empowers regulators to aggressively pursue financial fraud, conflicts of interest and manipulation of the system that benefit special interests at the expense of American families and businesses.
Strong Consumer Financial Protection Watchdog
The new independent Consumer Financial Protection Bureau will have the sole job of protecting American consumers from unfair, deceptive and abusive financial products and practices and will ensure people get the clear information they need on loans and other financial products from credit card companies, mortgage brokers, banks and others. American consumers already have protections against faulty appliances, contaminated food and dangerous toys. With the creation of the Consumer Financial Protection Bureau, they'll finally have a watchdog to oversee financial products, giving Americans confidence that there is a system in place that works for them—not just big banks on Wall Street.
Why Change Is Needed:The economic crisis was driven by an across-the-board failure to protect consumers. When no single office has consumer protections as its top priority, consumer protections don't get the attention they need. The result has been unfair and deceptive practices being allowed to spread unchallenged, nearly bringing down the entire financial system.
Consolidates and strengthens consumer protection responsibilities currently handled by the Office of the Comptroller of the Currency, Office of Thrift Supervision, Federal Deposit Insurance Corporation, Federal Reserve, National Credit Union Administration, the Department of Housing and Urban Development, and Federal Trade Commission.
Able to Act Fast:
With this Bureau on the lookout for bad deals and schemes, consumers won't have to wait for Congress to pass a law to be protected from bad business practices.
Creates a new Office of Financial Literacy.
Creates a national consumer complaint hotline so consumers will have, for the first time, a single toll-free number to report problems with financial products and services.
Makes one office accountable for consumer protections. With many agencies sharing responsibility, it's hard to know who is responsible for what, and easy for emerging problems that havent historically fallen under anyones purview, to fall through the cracks.
Works with Bank Regulators:
Coordinates with other regulators when examining banks to prevent undue regulatory burden. Consults with regulators before a proposal is issued and regulators could appeal regulations they believe would put the safety and soundness of the banking system or the stability of the financial system at risk.
Clearly, fraud and faulty business practices are a big problem in the U.S., today. It remains to be seen if new legislation, wrapped up in the Wall Street Reform Act, will have the desired effect of saving millions of people from the throes and losses associated with fraud. But we can hope that the governement is steering us back in the right direction, and we can get out and vote for legislation that works in our favor and leaders who care about our business interests.
In the mean time, refer to this list for ways to protect yourself from fraudulent practices:
- Keep your cards close to your body
- Always verify the amount before starting
- If there are blank spaces, fill in with a 0
- Check your credit report yearly
- Shred old bills with your CC number
- Choose a card with fraud protection
- Write “Please Ask For ID” on the back
- Be careful online!
- Keep your software up to date
- Install a personal firewall
- Use strong passwords + change often
- Do not submit credit card info to a site without SSL protection