Credit Card Fraud On The Rise In MA

Wednesday, March 20, 2013

GoLocalWorcester News Team

Bay Staters should keep an extra close eye on their credit and debit cards, after new research from FICO Labs found an increase in debit and credit card fraud in Massachusetts in 2012.

With a 2.7 percent increase in the state's fraud rate, the Commonwealth was one of 20 states to see a rise in credit and debit card fraud, according to the FICO Labs research, which sifted through data from more than 2.5 billion credit and debit cards worldwide from the FICO Falcon Fraud Consortium.

Vermont saw a bigger spike than its neighbor to the south, with a 7.6 percent increase in its fraud rate. Maine saw an increase of 7.2 percent in its fraud rate as well.

No change in fraud rates was recorded in New Hampshire and Rhode Island, and according to FICO Labs the fraud rate in Connecticut decreased by 3.2 percent.

Cardholders in South Dakota, where the rate jumped nearly 26 percent, the largest increase in the country, were not so lucky.

ATMs the biggest culprit

Meanwhile, ATM fraud is increasingly standing out as the leading site of such compromises. According to FICO, 46 percent of all card skimming reported by its card alert service occurred at bank ATMs, while 36 percent took place at retail point-of-sale (POS) terminals, and 18 percent occurred at white-label ATMs, which are machines not operated by banks.

"The prevailing fraud scheme has been ATM skimming because that only requires a PIN, not a signature -- a finding that is clearly reflected in the map," said John Buzzard, who manages the FICO Card Alert Service, which analyzes more than 65 percent of all ATM transactions in the U.S. each day.

"Skimming at bank-owned ATMs and white label/off-premise ATMs increased in 2012, and California, Florida and the Northeast were hit particularly hard."

These results differed significantly from the data recorded in 2011, when 79 percent of skimming incidents occurred at POS terminals, due in large part to a multi-state crime ring that was identified by the FICO Card Alert Service.

Fraud continues to be problematic and we must remain vigilant about protecting credit cards and bank accounts, but the good news is that innovative technologies are making it increasingly difficult to commit payment fraud," said Doug Clare, FICO's fraud chief.

"In the 21 years since FICO Falcon Fraud Manager brought real-time fraud detection to the marketplace, the losses on U.S. credit cards, as a percentage of credit card sales, have been cut by more than 70 percent. It's important to keep that in mind despite year-to-year fluctuations in fraud activity."

FICO has made an interactive map showing the trends in debit and credit card fraud across the country available online. Click here to view it.