Has Credit Card Fraud Increased during COVID Pandemic?

Credit card fraud is a perennial problem, which is why the credit fraud and identity theft detection market has grown so large over the past decade. In 2021, the market for these services stands at roughly $3.2 billion.  Nevertheless, many unsuspecting people continue to fall victim to credit card fraud.

The coronavirus pandemic has upended everyday life. One thing it has contributed to is more credit card fraud. According to CNBC, almost a third of the worldwide credit fraud takes place in the United States. In 2019, the amount of fraud reached nearly $29 billion—a staggering sum. But at the end of 2020, the Aite Group estimated that the U.S. experienced $11 billion in credit card fraud.

How Scammers Target Consumers

One reason fraud increased during the pandemic was that many people were pressed for cash. For this reason, they turned to stealing when there are no jobs. According to one researcher, scams increased dramatically during the coronavirus pandemic and have taken many forms, including:

• Charitable giving scams. Many fraudsters will pretend to operate a charity, preying on people’s goodwill to help those in need. In reality, the scammers run away with the money. These scams can include crowdfunding scams.
• Phishing scams. Many people are receiving emails with COVID headlines. The email might seem to come from a legitimate source. Clicking on a link can grant scammers access to your computer and, if credit card information is stored online, to that information.
• Cleaning service scams. Some companies allege they can “deep clean” your home or office to kill the novel coronavirus. Instead, they just steal your credit card information and do not make your home any safer.

Always remember to review your credit information at least once a year to find out if anyone has opened an account using your personal information. Also regularly check your credit card bills and report suspicious activity promptly to your card issuer.

Businesses Are Also Affected by Credit Card Fraud

Consumers are not the only ones who are victimized. Small businesses also can suffer when fraudsters use stolen credit card information to make purchases. Too many chargebacks can be devastating to a small business with tight profit margins., especially since many chargebacks are over $100. For this reason, businesses also use fraud protection services to minimize their risk.

Businesses unfortunately do not have the same legal protections as consumers, so they must remain ever vigilant of red flags. One way to make a company more secure is to train employees to review credit cards before swiping them to ensure that they are not expired. For online shopping carts, businesses should ensure that the shipping address matches the billing address and that the security code is accurate. If any information is wrong, then the sale does not go through.

Bankruptcy Can Help Recovery from Fraud

Most fraud results in unsecured debts which can be eliminated in a bankruptcy. At Nowack & Olson, PLLC, our Plantation bankruptcy lawyers have assisted many consumers deal with debts associated with identity theft. Please contact us today. We can help you without ever needing to leave home.

Resources:

cnbc.com/2021/01/27/credit-card-fraud-is-on-the-rise-due-to-covid-pandemic.html

creditcards.com/credit-card-news/coronavirus-credit-card-scams/

ibisworld.com/industry-statistics/market-size/identity-theft-protection-services-united-states/#:~:text=The%20market%20size%2C%20measured%20by,is%20%243.2bn%20in%202021.&text=past%205%20years%3F-,The%20market%20size%20of%20the%20Identity%20Theft%20Protection%20Services%20industry,average%20between%202016%20and%202021.