Credit Card Fraud Surpasses $1 Billion in Half of 2010

If your business accepts credit cards, you may want to beef up your credit card security systems because credit-card fraud for online, mail-order and telephone purchases has increased to “unprecedented levels” in the United States, according to new research.

A new report reveals payment fraud swelled by 32 percent to $1.14 billion from January to June compared with the same time span last year. And there’s no clear sign of a slowdown.

“We predict this could reach $2.83 billion by the end of the year,” said Carl Clump, CEO of Retail Decisions, which released the report this week. Payment fraud reached $2.14 billion in 2009.

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The fraud -prevention group suggests the unemployment rate and fraudsters’ clever tactics are to blame.

“Criminals are creative, and their devices can be invisible and technical or visible and convincing,” Clump said in a statement. “Fraudsters often try tactics such as phishing – sending e-mails which appear to be from a genuine company and ask for a customer’s account details or e-mails containing a Trojan link, which once clicked on means the fraudster can monitor keyboard strokes and discover important, personal information such as passwords.”

Retail Decisions, which every year screens about 19 billion transactions for fraud, also discovered fraudsters are buying more expensive items, on average $149 in the first six months this year compared with an average purchase of $111 during the same period in 2009.

“This is a stark warning for U.S. merchants and consumers to protect themselves against payment fraud,” Clump said.

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