While many businesses had to adapt during 2020, including a major shift from physical to online retail, payment card fraudsters also had to adapt. COVID-19 lockdown restrictions, especially in the first two quarters of 2020, dramatically changed the way shopping was done around the globe.
Payment card fraud numbers from the first two quarters, according to BPFI, are quite concerning. The latest credit and debit card fraud losses for the first half of 2020 amounted to €12.2 million across more than 143,000 fraudulent debit and credit card transactions. While consumers dramatically changed their shopping behavior from physical retail to online, fraudsters followed suit. Because of this, there was a 21% increase in ‘card not present’ fraud transactions. These transactions occur online when a fraudster uses the details of a credit or debit card they have stolen without the card being physically present. Following the trend from in-store retail to online, there was also a parallel decrease in physical instances of fraud. In-store, or point of sale, cases of fraud were down 52% in the first half of 2020, when compared to a year earlier.
But how are these fraudsters able to obtain this information so easily without physically stealing credit or debit cards? According to Brian Hayes, chief executive of BPFI, 72 percent of all fraudulent transactions involved the theft of card details. Fraudsters are able to obtain this information by using fake text message and email scams, or fake websites. Over the last 12 months (ending in April 2021), these criminals have very quickly tailored their scams to take advantage of the growth of online retail. According to Hayes, one of the tactics they use is impersonation scams, in which the scammers mimic delivery companies, utility companies, or banks, for example.
There are many ways for consumers to avoid these scammers and increase their protection against fraud. While cases of online fraud increased dramatically during this pandemic, Hayes states that lost or stolen cards still accounted for about 21% of card fraud. Because of this, consumers are encouraged to be vigilant when using their cards in store, and to treat their card like cash, keeping it safe at all times. In terms of tips for staying safe while shopping online, consumers should make sure to use secure websites, making sure the address begins with ‘https’ before the purchase is made. Another key is to not use public wifi under any circumstances while making purchases, and to go directly to the website of the online seller, rather than using pop up or social media ads. For further resources, a wealth of information on this subject can be found through BPFI’s fraud awareness initiative, www.FraudSMART.ie .