Fraudsters are shifting their tactics in the face of new card security measures – but consumers can fight back to protect their accounts with tactics of their own.
Those are among the conclusions of the 2017 Identity Fraud Study from Javelin Strategy & Research released this week. The study examined fraud on payment cards and other types of consumer accounts.
Despite the rollout of EMV chip cards, fraud increased in 2016, Javelin's annual survey found. The number of fraud victims jumped to a new record of 15.4 million, affecting 6.2 percent of U.S. consumers.
In dollar terms, fraud losses were up a relatively modest $700 million to $16 billion.
“After five years of relatively small growth or even decreases in fraud, this year’s findings drive home that fraudsters never rest,” Javelin Research Director Al Pascual said in a statement, "and when one area is closed, they adapt and find new approaches."
Here are the findings, and security experts' countermeasures:
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Card-not-present fraud jumped 40 percent.
A typical card-not-present fraud is an online transaction. The jump in online fraud was expected: As chip cards raised protections for in-store transactions, crooks shifted to online sales.
What to do: Only use your cards on trusted sites, checking for a secure "https" connection and correct web address, to protect your card number. Register to receive text alerts about transactions in your bank account or credit card accounts, so suspicious transactions will raise red flags immediately.
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Account takeover incidents rose 31 percent.
That represents a rebound, as takeovers declined to a low in 2014. Takeovers were among the mostly costly and time-consuming frauds, averaging $253 in costs for affected consumers.
What to do: Guard your birthdate, address and other sensitive data online, particularly on social media. Register for text alerts to signal you about password changes, and sign up for credit report monitoring that will generate alerts of change-of-address attempts.
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New account fraud held steady.
In this type of fraud, criminals use your identity to open new accounts. Detection slowed, with many consumers discovering the breach only after checking their credit report or being called by a debt collector to pay the unauthorized bills.
What to do: Guard your personal information online, make sure only friends can see your profile. Set up credit report monitoring with alerts to detect new account fraud. Halt the damage quickly by calling the supposed creditors and putting a fraud alert on your credit report, blocking further attempts to use your identity.
Free credit tools for consumers
Credit card users “are increasingly worried about identity theft, and feel powerless to do anything about it,” said Pranav Khanna, vice president of U.S. cards at Capital One. By using alerts to monitor transactions and changes on the credit report, “They can get peace of mind.”