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Credit card fraud will be increasing due to the pandemic, experts say

Credit card fraud will be increasing due to the pandemic, experts say

January 28, 2021: According to the recent Nilson Report data, payment card fraud losses reached $28.65 billion worldwide in 2019. The United States is responsible for being the most prone to card fraud country worldwide.

A research director for Aite Group’s Fraud and anti-money laundering practice, July Conroy, said, “estimated losses the U.S. saw about $11 billion worth due to credit card fraud by the end of 2020.”

The coronavirus pandemic is also playing a significant role in the explosive growth of card fraud activity.

Credit card fraud impacts consumers, merchants, and issuers alike. Its economic cost goes far beyond the cost of illegally purchased merchandise. Big and small Businesses spend millions on protecting themselves from FraudFraud.

Fraud is kind of like an arms race. Any technology is being implemented; the fraudsters will eventually figure out a workaround, so you must continuously keep investing. And that’s the cost of business.” Said Fergerson.

While the Fair Credit Billing Act, the Electronic Fund Transfer Act, and the Truth in Lending Act, the latter two known as Regulations E and Z, are made to protect consumers from card fraud.

While according to some experts, they are not enough to protect smaller businesses from fraudulent transactions.

“For a big business, they can absorb a loss on even a pretty significant loss,” said Fergerson.

Fergerson added, “If a small one-shop business or a restaurant all of a sudden has a $10,000 loss, that could be the difference between making payroll and not making payroll for that company.”

Companies that issue credit cards are looking for technological solutions to stop the FraudFraud. Mike Lemberger, Visa’s senior vice president and regional risk officer for North America, said Visa is partnering with financial institutions and merchants to prevent Fraud.

However, experts in the field are not optimistic that card fraud can be ended. Colin Sims, CEO of Forter, said, “As long as there is digital money transfer, it’s going to be a problem.”

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