The amount of payment fraud for general transactions and credit card payments increased by 36% between 2012 and 2015, according to data released yesterday by the Federal Reserve Board. The largest increase was in card-related fraud, which accounted for 78% of all instances, compared with 14% for ACH and 9% for checks.
While the rate of fraud is increasing, the report notes that on an overall basis, the amount of fraud is still small relative to the number of total transactions that take place on a daily basis. Payment fraud occurs “only a fraction” of 1% of the total number of transactions, according to the Fed, and “payments providers have increasingly introduced technological innovations to mitigate fraud or to add convenience, security, and other potential improvements to the payment experience.”
There was $8.3 billion in payment fraud in 2015, up from $6.1 billion in 2012, according to the report. Card-related fraud accounted for $6.46 billion of that total, up from $3.95 billion in 2012.
While the amount of in-person card fraud decreased during the course of the three-year period, the frequency of remote card fraud increased during the same timeframe. The amount of remote card fraud was $4.6 billion in 2016, up from $3.4 billion a year earlier.
“The rate of card fraud, by value, stabilized from 2015 to 2016, with the rate of in-person card fraud decreasing significantly while the rate of remote card increased significantly,” the report concluded. “The findings show that, while vulnerabilities exist — and specific experiences are likely to vary substantially from the overall picture — the U.S. payments system, in the aggregate, is resilient and responsive with respect to payments fraud vulnerabilities.”
