How Big of a Problem Is Credit Card Fraud?

How big of a problem is credit card fraud?

Being the target of credit card fraud twice in the last year, I wanted to write an article regarding the widespread problem. You would think with advances in technology for fighting credit card fraud that the problem should be diminishing. However, this is anything but the case. According to a recent Nilson Report, payment card fraud losses worldwide totaled $27.85 billion in 2018 and is projected to reach a staggering loss of $40.63 billion within the next 10 years.

Credit card fraud is a big problem that doesn’t look to be slowing down any time soon. Why is credit card fraud so bad and what can you do to try and avoid being a target?

Credit Card Fraud Is an Enormous Problem

It might come as a surprise or it may not to some people that the leading country for credit card fraud is the United States. The U.S. takes first place with 38.6% of all reported card fraud losses totaling more than $9.4 billion dollars. A report by the United States Sentencing Commission showed in 2019 that 76,538 cases of credit card fraud were reported.

Since 2015 credit card fraud has increased by 13.3%. The median loss for card fraud has been $77,000. 17.8% of these losses involved amounts of $15,000 or less. Offenders of credit card fraud are almost 80% of the time men with an average age of 34. 45.4% of these offenders typically have little to no criminal history. Race doesn’t seem to be a factor with a close comparison of 37.6% of offenders being Black, 34.2% Hispanic, and 22% White.

9.5% of theft, property destruction, and fraud offenses involved credit card fraud. Some of the top areas in the country for credit card fraud are Florida and California. Being a resident of Florida for many years now, it does not surprise me that Florida is a top state when it comes to credit card fraud. However, other top areas include South Carolina and Missouri which seems to not be the first places that come to mind with the possibility of widespread credit card fraud.

Why Is Credit Card Fraud So Bad? 

Being the target of credit card fraud a few times in the last year, I have wondered why it is so bad. Particularly, with all the advances in technology to try and defend against the thieves why isn’t credit card fraud declining rapidly instead of keeping the steady pace of growth that it seems to be?

Credit Card Fraud - Why is the problem so big?


Technology is helping with trying to limit credit card fraud but the crooks are also using technology to their advantage. This shouldn’t come as a surprise with the electronic world we live in today.

Credit card issuers are using things, such as chip technology in their cards and notifications for possible unauthorized transactions, to try and stop credit card fraudsters in their tracks. Yet, the thieves are using devices like electronic card skimmers to steal credit card information. The internet and email with phishing email scams in addition to the widespread use of public non-secure wi-fi networks are only adding to the ease of accessibility to personal information by the people that are looking for it.

Advances in technology to limit credit card fraud are helping but it seems the thieves are also using it to their advantage.

Credit Card Fraud Prosecution and Getting Caught 

Part of the problem with the widespread credit card fraud is the rate at which people are caught and the degree to which the guilty people are held accountable. Moreover, I believe the profitability of credit card issuers also has something to do with the frequency of trying to hold people responsible for committing credit card fraud.

The report by the United States Sentencing Commission showed that sentences for the criminals that commit credit card fraud were decreased for the people that had minor or minimal participation in a crime. The average sentence length for a credit card offender was 31 months. The report went on to show that 37.9% of the people convicted of an offense carrying a mandatory minimum penalty 18.2% of those same people were relieved of that penalty. That is almost half of the people that should have received a mandatory sentence for credit card fraud. These people were let go with a lesser sentence.

Another part of the problem with credit card fraud is the profit card issuers make in addition to the amount of time and money it might take to catch the criminals. For a credit card fraud thief to steal something like $600 doesn’t seem like it is worth the time to law enforcement or a credit card company to investigate. Low dollar thefts are often just a cost of doing business for the credit card company.

The credit card issuers make a lot of money and chasing down people that commit credit card fraud for low dollar amounts doesn’t seem like it is worth the time or expense in many cases. With the average credit card balance in America of around $6,000 and an interest rate of 16%, credit card companies are not completely on the losing side of credit card fraud when the balance sheet is added up.

How Difficult Can It Really Be To Catch Credit Card Fraud?

Last year I was targeted twice for credit card fraud and I wonder why these people can’t be caught. Even though there is a cost to catching people, it doesn’t seem like it would take long or even cost much in the time to investigate. The problem I have with credit card fraud today is the technology to catch people. Take a few examples of my recent experience with credit card fraud.

First, I don’t historically use a credit card very often just for the fact of trying to stay away from being the target of credit card thieves. The only time I really used one in the last year was when traveling and eating out a few times when I did not have the cash on me. The truth is I prefer to use cash. With the low frequency I use a credit card, it is surprising that I would have an instance of fraud let alone it occurring twice.

The first time I noticed something with possible credit card fraud last year was when I paid for dinner. The following day I had a weird zero charge on the card I used. Reaching out to the credit card issuer they said it did appear to be a strange charge and it was likely someone testing the card to see if it was valid before using it. The bank immediately canceled the card and sent a new one. There was no damage done with any charges in this instance.

The second occurrence I encountered with credit card fraud last year was in December. My wife and I had to drive to Illinois and we stayed at a hotel in Franklin, Tennessee on the way up and the same place on the drive back. We made the trip in August. This past December I was notified about a possible fraudulent charge at Sam’s Club in Franklin, Tennessee for about $600.

It seems very coincidental that a fraudulent charge on my credit card would be in the same town I stayed over in on a road trip. The same town where I stayed in a hotel and used my credit card. There was also a second charge for about $100 in pizza orders. With the text alert I got on my phone about the possibility of a fraudulent credit charge on my card, I reached out to my bank and they immediately canceled the card.

The part that made me really think about catching credit card fraud came with how the charges at Sam’s Club were described. It said the credit card number was keyed into a register. This certainly sounds suspicious. How often is this done today?

It would seem to me that a person working in the hotel in Franklin, Tennessee stole my credit card information. Next, they waited several months to try and use it. The same person either worked at Sam’s Club now or they had a person on the inside that would key in the stolen credit card information.

The question I asked the bank was how hard could it be to catch the person that committed credit card fraud in Tennessee? Pull the cameras from the time the charge happened and see who was keying in the credit card information. I only used my credit card at the hotel in Franklin, Tennessee while I was at the hotel. Look for an employee at Sam’s club that might have worked at that same hotel or question the person that keyed in the credit card information. How long can that take?

To my surprise, the bank didn’t seem too concerned about catching the credit card thieves. They just canceled my card and said I wouldn’t be responsible for the charges. To me, this was too easy. It was just too simple for me to wipe away the charges on my card and nothing else would be done. The credit card thieves got away with it. They got away with the crime when there is a good chance it could have been quickly solved.

Credit Card Fraud Is Just Accepted and This Is a Problem

With my experience and credit card fraud, it is clear the problem is how the practice just appears to be accepted and particularly for lower dollar amounts. When thieves get away with a crime it doesn’t provide much incentive for them to stop. Many of the more experienced credit card thieves also know to stick with frequent low dollar thefts to stay off the radar of law enforcement.

Credit Card Fraud Being An Accepted Crime Is Clearly A Problem

Credit card fraud being an accepted crime whether it is a small dollar amount or not is clearly a problem. This is likely why the crime of credit fraud will not be slowing down any time soon. With no foreseeable slowdown in the future of credit card fraud, it is important to follow some guidelines to try and avoid being a target.

How Can You Limit the Possibility of Being a Target for Credit Card Fraud?

Don’t Use a Credit Card

Although it can be challenging in today’s electronic world, limiting the use of using a credit card will certainly lower the chances of being a victim of fraud. However, reducing the frequency of using a credit card will not completely prevent the chance of being a target. As in my own example, I believe I might have only used a card about a few dozen times in the same year I was hit two times with fraudulent use of my credit card.

Just having a credit card and not using it will not eliminate the probability of fraud either. But it can certainly lower the chances. Yet, large institutions having a data breach with your saved credit card information is not impossible. Therefore, if you own a credit card there isn’t a way to completely rule out the possibility of fraud.

Don’t Save Your Payment Information

Most bills can be paid online these days and more people are using the internet as their shopping mall. When you get the opportunity to save your payment information for future use with a company you are paying on the computer don’t save it if you are given a choice. This can help with a data breach. Also, it can help if a company makes an error in paying themselves for something you didn’t purchase.

Some places online will require a payment method to be kept with them if you want to use their service. If they do, think twice about using it or find another way if it is possible. With all the monthly services like Netflix or streaming television, it can be difficult to not put a card on file with the company. Try to limit the places this is done.

Don’t Give Your Credit Card Information Over the Phone

Not ever giving credit card information over the phone can be next to impossible today. Nevertheless, limit doing this. Do not ever give your account information to anyone you do not entirely trust on the telephone. This is particularly the case if someone is calling you and asking you for the information.

Collection agencies are notorious for calling people and asking for immediate payment information. Tell these people to send you something in the mail and never give out your credit card information to them.

Watch Your Credit Card

If you are using your credit card in a store or restaurant, try to avoid the person taking the card away. This can be challenging with dining out and therefore it can be a good choice to use cash. Someone that can take your credit card information into another room can easily take a quick picture with their phone. This allows a snapshot of a card number, expiration date, and security code.

Avoid Being the Target Of CREDIT CARD FRAUD. Don't let your credit card out of your sight.

Check Statements Regularly and Sign up for Notifications

Checking banking and credit card statement activity on a regular basis is very important. It can quickly show any irregularities. Also, I can’t stress enough on the importance of signing up for message notifications if the issuer of your credit card offers this service. In my case, this is really what likely led to stopping credit card thieves quickly in their tracks.

Sign up for text message notifications of suspicious credit card activity if it is offered through your credit card issuer.

Only Use Secure Websites To Enter Your Payment Information

When shopping online or making a bill payment it is important to ensure the website you are using is secure. This is sometimes seen by a small padlock in the address bar of the website in the browser. Just because a website shows it is secure, it doesn’t guarantee security. But it can help with at least getting this assurance.

The bottom line with entering payment information online is to ensure the site you are on is one that you trust and remember to never save your payment information on a website.

Pay Attention To Where You Use Your Credit or Debit Card

Because of the advances in technology, both thieves and consumers are benefitting when it comes to credit card fraud. Consumers have more tools to try and combat fraud while the crooks themselves are also using technology to their advantage. 

Devices such as skimmers are often used by credit fraud thieves to try and steal credit information. These devices are many times connected to gas pumps or ATM machines. If something looks out of the ordinary while attempting to use a credit card at a gas station or ATM, avoid using it. Go to another ATM or gas station and report the problem.

It is so easy today to just swipe a credit card for a transaction. The people stealing credit card information know this and try to use it to their advantage. Pay attention to where you are using your credit card to avoid issues.

Email, Spyware, and Malware Are a Problem

Probably one of the biggest problems with credit card fraud today is how the thieves are utilizing the internet and email to steal credit card information. Phishing email scams claiming to be a bank or some other institution they are not is common. Also, computer hackers are using spyware and malware to track keystrokes and record credit card information.

The issue with email scams is crooks can easily make a message look authentic and provide a link to a website that might also look genuine. Technology has not only made all this possible but also quite easy for even the least computer literate thief.

If you get an email asking for personal information, don’t respond and do not click on any of the links in it. Instead, proceed with caution and call the business. Ask them to mail you something. The reason it is important to ask for something in snail mail is the thieves are now even utilizing a mixture of the internet and telephone to try and steal what they can from unsuspecting consumers.

If you don’t know where an email or website hyperlink has come from, do not click on it. This can save you from possible credit card fraud.

Your Trash Is a Treasure

It might be difficult to believe with the electronic world we live in today, but your actual physical trash can be a treasure of information for thieves. Although most of the world has moved to electronic bills and information, there are still some things that go through the traditional mail service that can be of use to a credit card thief.

Use a shredder for any sensitive personal information that you throw away. At the very least, rip it up into as many tiny pieces as you can. Credit card offers, physical billing statements, and bank statements are all welcome pieces of information for credit card thieves that might be looking through your garbage.

Your trash can be a treasure for a thief.

One of the best things to do would be to stop getting pre-approved credit offers and this can be done by going to or calling 888-5-OPTOUT (888-567-8688). This is a service run by the credit reporting agencies Experian, Equifax, TransUnion, and Innovis. 

It’s not just your trash the thieves are after. It might also be going into your mailbox. Limit the things you get in the mail that might tempt less than honest people as well as the items you throw in your trash. This can only help with limiting the possibility of credit card fraud. 

What Can You Do if You Are the Victim of Credit Card Fraud?

The good news about credit card fraud is the Fair Credit Billing Act. This states that in most cases you would not be responsible for unauthorized charges that exceed $50 as long as they are disputed within 60 days from the time your bill is received. Most credit card issuers will take care of fraudulent charges. 

The best practice when you have been the target of credit card fraud is to report the problem to the card issuer immediately. A lot of times it can be easy to see that fraud has occurred. This might be because it is someplace you rarely or never shop or it might even be a case in which a charge is done in another state or part of the world you have never been to or visited. 

My own most recent story of credit card fraud shows how it can be difficult to dispute that someone has not used my credit card without my authorization. 

There are credit card users that try to scam the system with their own credit card, but for the most part, people are honest. Report any fraudulent activity on a credit card as soon as it is discovered and this should take care of any problems. Have the card immediately canceled. 

Final Word

Credit card fraud is a major problem and particularly in the United States. Technology is helping to try and fight credit card fraud but it is also assisting the thieves. A larger problem with the widespread credit fraud issue is the rate at which people are investigated, prosecuted, and convicted. 

Without more accountability for credit card thieves to be held responsible for even smaller crimes, the rate of credit card fraud will likely not decrease any time soon. Not all criminals are foolish. Many of them know that small-dollar crimes will likely not be investigated. 

Until credit card issuers, law enforcement, and the legal system start to take credit card fraud more seriously, nothing is probably going to change. It appears that credit card fraud has just become accepted and it is an expense for doing business. 

With the growing problem of credit card fraud, the only thing consumers can do is try to limit the possibility of being a victim. People that use credit cards need to understand that fraud is not only a possibility but it is also likely to happen at some point. When it does occur report the issue immediately to the credit issuer and have the card canceled. 

Don’t look for the crooks to be caught that stole your credit card information and used it illegally. This is especially the case if smaller dollar amounts were charged. Although you might feel as though you deserve some justice, law enforcement and your financial institution will likely not feel it is worth their time to investigate. 

If you do end being the target of credit card fraud, here are some helpful links that I found in my own experience. 

  • FBI Tips for avoiding credit card fraud

  • State credit card fraud laws

  • How to Deal With Repeated Credit Card Fraud

  • Federal Trade Commission: Disputing Credit Card Fraud


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