Common types of online payment fraud and how to prevent them
The regions with the highest credit card fraud
Global losses from credit card fraud are on the rise. For this article, we’ve analyzed recent research on payment fraud to decipher the regions with the highest credit card fraud, categorizing our findings into stats for the US, UK, Europe and Asia.
We’ll also explain how you can protect your business from fraud by leveraging our machine learning Fraud Detection Pro tool.
Global Payment Fraud Statistics
Before looking at specific regions with the highest credit card fraud, it’s important to understand the global context. This’ll make it easier to understand which nations are doing well – or not so well – in the global fight against fraud.
What’s causing these rising figures? To give you an idea, we’ve shed some light from PWC’s global 2020 survey:
- 47% of surveyed businesses acknowledged encountering instances of fraud within the last 2 years.
- Of these reported cases of fraud, 39% were attributed to external actors, while 37% were attributed to internal individuals.
- 20% of the reported frauds were the result of collusion between both internal and external parties.
Payment Fraud Statistics in Europe
There’s some better news in Europe. In 2021, credit card fraud fell to its lowest level (0.028%) since the European Central Bank (ECB) began collecting data in 2008. Here are some of the key insights from the ECB’s 2021 report…
- Following an 8% reduction in 2020, the overall value of card fraud experienced an 11% decline in 2021.
- The value of card-not-present fraud saw a 12% decrease in 2021, primarily attributed to the widespread implementation of robust customer authentication measures across the market.
- Regarding card-present fraud, involving the use of counterfeit cards at retail outlets and ATMs, there was a remarkable decline of 37% in 2020, followed by an even more substantial decrease of 42% in 2021. This decline was driven by the global adoption of industry standards, leading to the near eradication of such fraudulent activities.
- In the context of cards issued within SEPA, cross-border transactions contributed to 63% of the total card fraud value in the year 2021.
Payment Fraud Statistics in the UK
Despite having the highest fraudster rates in Europe, the UK continues to lead the fight against credit card fraud loss. Here are the key stats from UK Finance’s 2023 Annual Fraud Report:
- In 2022, more than £1.2 billion was stolen via authorized and unauthorized criminal activities, which translates to over £2,300 lost every minute.
- Out of the cases involving Authorized Push Payment (APP) fraud, 78% originated from online sources, while 18% came through telecommunications channels.
- The banking and finance sector successfully thwarted an additional £1.2 billion of unauthorized fraud, effectively preventing these funds from falling into the possession of criminals.
- Remote purchase fraud, which is when fraudsters use pilfered card information to make purchases online or via telephone and mail, continues to stand as the leading cause of losses, amounting to £395.7 million.
Payment Fraud Statistics in the US
According to the Federal Trade Commission’s 2022 figures, reported incidents of fraud have surged, with the Consumer Sentinel Network recording 2.4 million fraud reports in 2022, down from 2.9 million in 2021.
Here’s a breakdown from those figures..
- The total reported losses for 2022 have skyrocketed to almost $8.8 billion, surpassing the $6.1 billion reported in 2021.
- Among the most common types of fraud, imposter scams dominate the list in terms of reported fraud occurrences, followed by online shopping, prizes and sweepstakes, investments, and business and job opportunities frauds.
- In 2022, individuals reported losses of $2.6 billion to imposters, marking a rise from $2.4 billion the previous year. A noteworthy trend relates to the surge in business imposters, who are deceivers that falsely claim connections with reputable companies.
- In 2020, losses attributed to business imposters were at $196 million. This figure soared to $453 million in the subsequent year and further escalated to $660 million in 2022.
- In 2022, consumers reported losses of nearly $3.8 billion to investment scams — surpassing losses from all other types of fraud in the FTC survey. This figure more than doubles the losses reported for investment scams in 2021.
- Scammers have expanded their reach to social media platforms. Losses facilitated through these platforms amounted to $1.2 billion in 2022. Nevertheless, phone scams remain the most financially damaging, with a median reported loss per person of $1,400.
Payment Fraud Statistics in Asia
The Global Identity & Fraud Report by Experian emphasized the heightened susceptibility of consumers in China and India, which revealed the following…
- 29% of individuals in each market have fallen victim to online fraud. These rates slightly surpass the global average, where nearly 1 in 4 consumers have encountered comparable situations.
Despite this, a distinct difference arises in the degree of concern expressed by consumers.
- In India, 45% of consumers exhibit significant concern regarding fraud and identity theft, whereas only 9% of Chinese consumers share similar apprehensions. Meanwhile, 26% of consumers in Singapore express strong apprehension concerning fraud occurrences.
LexisNexis data found that the growing popularity and robust usage of contactless payment options in the APAC region have significantly fueled the escalation of QR code fraud. QR code-based payments and peer-to-peer transfers are swiftly becoming the predominant modes of payment across Southeast Asia and India.
Meanwhile, the global surge in Buy Now Pay Later (BNPL) adoption, especially in the EMEA region, has contributed to a surge in instances of New Account Opening fraud.
Avoid fraud with Checkout.com
Thankfully, you can help prevent your business from becoming one of these statistics in many ways, including Checkout.com’s Fraud Detection Pro tool. With this integration, you can leverage our flexible, machine learning product to protect your business from fraud while maximizing acceptance rates.
Contact our sales team for more information on how to protect your business from emerging fraud threats.
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