Card Fraud Losses Hit $16 Billion Worldwide
The Nilson Report, a leading publication that covers the credit card industry, reported Wednesday that worldwide fraud losses on credit cards, debit cards and prepaid cards hit $16.31 billion in 2014 on a total card sales volume of $28.844 trillion.
This translates to a rate of 5.65 cents in fraud losses per every $100 in volume, the publication reported. In addition, fraud grew by 19% last year, while overall volume only grew by 15%.
Nilson reported that U.S. fraud losses reached 12.75 cents for every $100 in volume annually, and that the U.S. accounted for 48.2% of the world’s card fraud losses. At the same time, the U.S. only contributed 21.4% of the world’s overall card sales volume.
Card losses stemmed from counterfeit fraud, card not present fraud, fraudulent applications, lost and stolen fraud, card not received fraud and other less significant categories, Nilson reported.
"Multiple factors contributed to that gap," Nilson Report Publisher David Robertson said. "Nothing mattered more than the lack of an EMV-compliant infrastructure."
Robertson explained that contended EMV technology provides the best protection against losses from counterfeit cards, which accounted for 49% of all card fraud losses worldwide last year.
U.S. issuers were slammed by losses due to counterfeiting, which was fueled by data center breaches that made tens of millions of stolen card account numbers as well as personal cardholder identification information available, Robertson explained. The combination makes fraud tougher to fight. U.S. issuer losses due to counterfeiting of $3.89 billion last year accounted for 23.9% of all global fraud losses, he added.