The U.S. is responsible for more than a third of the world’s credit card fraud.
While fraud losses incurred on all credit, debit and prepayment cards reached $21.84 billion last year, losses in the U.S. accounted for $8.45 billion, or 38.7% of the total volume, according to the Nilson Report, a trade newsletter covering the industry. At the same time, the nation generated just 22.9% of global purchase and cash volume.
Total credit card fraud losses grew by 20.6% over the last year, outpacing volume, which clipped upward by only 7.3%. They resulted in $15.72 billion in losses to card issuers, while merchants and acquirers lost the remaining $6.12 billion. Most losses to credit card companies occur from counterfeit cards used at point of sale or ATMs.
The report notes the best defense against fraud is using chip cards, which now handle nearly 36% of Visa, Mastercard, Union Pay, Discover/Diners, JCB and American Express transactions worldwide. In the U.S., chip cards accounted for less than 2% of total fraud.
Credit card fraud has become worse each year this decade and is expected to total $3167 billion by 2020. Still, the good news is that fraud remains lower than the peak years of the 1970s.