Identity Theft And Credit Card Fraud Statistics You Should Know

Two years ago I went online to check my credit card statement and found the balance was roughly $1500 higher than I thought it was. After further research, it turned out that my credit card statement showed that I had apparently taken a trip to Jamaica.

Now, I’m a crazy busy single mom of four kids, and believe me when I tell you I’d have known if I’d been to Jamaica. 

The FTC (Federal Trade Commission) received over 3 million reports of credit card fraud and identity theft incidents in 2019. That means I’m far from the only one who has been the victim of credit card fraud.

To me, it seems like it’d be smarter to get a real job and have guaranteed earned income each month than to take the risk of getting convicted of a credit card fraud charge. But apparently, thousands of criminals disagree.

Here are some other credit card fraud statistics that might surprise you, along with some tips for keeping your credit and debit cards safe from financial fraudsters.

Credit Card Fraud Statistics

$2 Billion Is Lost Via Credit Card Fraud Each Year: The Federal Trade Commission’s annual Consumer Sentinel Network report gives citizens a snapshot of problems consumers experience in the marketplace. According to the 2019 report, Americans lost nearly $2 billion to credit card fraud and identity theft in 2019 alone.

The Nilson Report tells us that in 2018, over $27 billion was lost due to credit card theft worldwide. Clearly, the problem of credit card fraud isn’t going away.

Your information sells for just a few bucks: Experian reports that your credit card information only goes for between $5 and $110 when sold on the dark web.

Most credit card fraud is committed by men: The average credit card fraudster is a 34-year-old American male. 49.4 percent had little or no prior criminal history

The US is #1 in Credit Card Fraud: This statistic may or may not surprise you. But if you’re wondering which country has the highest credit card fraud rate among its residents, the answer is the United States.

The report from Nilson found that a whopping 34 percent of worldwide credit card fraud happens in the U.S. Maybe it’s because we’re careless or maybe it’s just because we shop more, but that’s a frightening number considering our population compared to the world as a whole.

Nevada had the highest number of fraud reports per capita:  In 2019, Nevada reported 993 incidents per 100,000 residents. This makes sense considering the tourist business they do there. 

However, California had the highest number of fraud incidents as a whole; they reported over 243,000 cases of fraud in 2019 while Nevada reported 27,463. Conversely, South Dakota had the lowest number of fraud reports per capita at 366.

47% of Americans Have Experienced Credit Card Fraud: In fact, over 47 percent of Americans have been victims of credit card fraud in the last five years. Credit card fraud could be defined as someone using your credit card without authorization or someone opening a card in your name without authorization. Fortunately, companies make it easy to dispute credit card charges.

21% of Americans Have Experienced Debit Card Fraud: In addition to the high credit card fraud numbers, over ⅕ of Americans (21 percent) have been the victims of debit card fraud in the last five years. Although not as much fraud is committed with debit card compromises than with credit card compromises, the numbers are still alarming.

Most Common Credit Card Scams

Opening a new account in someone else’s name: The 2019 FTC report found that 88% of credit card fraud reports involved criminals opening new credit accounts in someone else’s name.

For that reason, you’ll want to be sure you’re on an official credit card site before you open a new credit card.

Credit card skimming: This is when a criminal steals your credit card information, rather than the actual credit card, and then uses it to make fraudulent purchases, kind of like what happened to me with the Jamaican vacation.

How to Avoid Identity Theft and Credit Card Fraud

Now let’s talk about ways you can avoid credit card fraud and identity theft. Here are some suggestions.

Know the Law

Knowing the law is important to preventing and minimizing your financial losses from credit card fraud. Fortunately, the government has enacted two bills to help protect citizens from credit and debit card losses.

The Fair Credit Billing Act (FCBA) limits your liability for credit card fraud to a maximum of $50 in many cases. However, you are absolved of all liability if you report your card stolen before it is used.

Where your card information was stolen from makes a difference as well. If your card was stolen in person the $50 liability limit stands. Conversely, if your card number was stolen (but not the card itself) you are not responsible for any of the charges.

When it comes to debit card fraud there are stopgaps in place to protect you as well. The Electronic Fund Transfer Act (EFTA) will protect you from any fraud liability if you report the card stolen before it is used.

If you report the card stolen after it is used, your liability level varies depending on the timing. If you report the card stolen within two days after it is used, your maximum liability is $50.

Reporting the card stolen more than two days but less than 60 days after your statement has been sent to you results in a $500 maximum liability for the card owner.

If you report the card stolen more than 60 days after your statement has been mailed, you’re on the hook for all of the fraudulent charges for all accounts linked to the debit card.

In other words, check your accounts regularly for fraudulent activity, and report any suspicious activity promptly.

Only Use Your Cards on Trustworthy Sites

I touched on this a bit above, but it’s worth mentioning again. Only use your credit card on sites that you know to be reputable. Checking a site’s security standards is important too.

Read a site’s privacy policy and find out if and how your data is protected. In addition, stick with shopping on websites that have an SSL certificate. You can know this by checking if a site starts with “https” instead of just “http”.

Don’t Allow Websites to Save Your Credit Card Information

Another helpful tip in preventing credit card fraud is to not allow websites to save your credit card information. Be sure to hit the “Don’t Save” button when prompted.

The fewer places your credit card information is stored on the internet, the less vulnerable you are to potential fraud.

Check Your Credit Card and Debit Card Accounts Often

Be sure to check your credit and debit card accounts often to quickly catch any fraudulent activity that does happen. That way you can report the fraud right away, protecting yourself and your money.

If you think this will take too much time, it could be a sign that you have too many credit cards.

Call the customer service number for your bank or credit card company the moment you notice any transaction that doesn’t seem legit.

Sign Up for Alerts with Your Credit Card Company

Another way to monitor your credit card accounts for fraud is to sign up for alerts with your credit card company. Many credit card companies and banks will allow you to adjust your account settings to trigger an email or text alert in the case of unusual activity. Jim gets alerts for every transaction over $0.

The alert might trigger if there is more activity than usual on your account, if a charge from out of the country or state you live in appears, or if a charge that’s over a certain dollar amount appears.

Getting an alert soon after a transaction tries to process can help ensure you can work with your bank or credit card company to reject the transaction as soon as possible.

Here’s how to set up a do it yourself identity theft protection system. 

✨ Related: How to Freeze Your Credit

Consider Signing Up for a Credit Monitoring Service

If you want added protection from credit card fraud, consider signing up for a credit monitoring service. Credit monitoring services can help you protect yourself against fraud in several ways.

The right service can tell you information such as:

• When new credit account are opened in your name
• What your current credit card balances are
• When there’s a substantial increase or decrease on your credit balances
• If any suspicious activity appears on one of your credit card accounts

Shop around before choosing a credit monitoring service, however. Some of them can be costly. Others, such as Capital One’s Creditwise are free.

Pull Your Credit Bureau Report Annually

Did you know you can pull your own credit report for free every year by visiting www.annualcreditreport.com? This site is operated by the three main credit reporting bureaus (TransUnion, Equifax, and Experian) and was created to help comply with a government credit protection act called the Fair and Accurate Credit Transaction Act.

By pulling your own credit report annually, you can see if there is any information on the report that may be fraudulent. The downside to using this website as opposed to a credit monitoring service is that you can only get the information for free once a year.

By that time, a fraudulent transaction may be long past the limitations needed to help you avoid financial responsibility. But it is a great site to visit for a once-a-year credit checkup.

Here are some other ways to check your credit for free. 

Conclusion

Credit card fraud statistics show that credit card fraud is indeed a real problem for millions of people each year. Knowing fraud statistics and the ways in which thieves steal your credit card information can help you prevent credit card fraud in your own life.

Using a credit card monitoring service can help too.

Have you ever been the victim of credit card fraud? Feel free to share your story in the comments section.