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The Resource Center Credit Fraud & Credit Monitoring The Resource Center | article

Credit Cards Dominate Identity Theft Measures in U.S.

Data breaches are only becoming more common around the world.Data breaches are only becoming more common around the world.

In 2014, there were 1,540 such incidents that led to nearly 1 billion records being compromised, which marks a 46 percent increase over the previous year. Of these breaches, only a small fraction were the result of accidents. Most were caused by malicious outsiders or insiders looking to use the stolen data for financial gain.

The data makes it clear that North America — particularly the United States — is a prime target for data breaches and identity theft. The U.S. experienced 1,107 breaches last year, accounting for 72 percent of the global total. The next largest target, the U.K, wasn’t even close, at only 8 percent of the total.

In addition to being home to the most data breaches, Americans also experiences the most credit card fraud in the world.

Despite security improvements, credit card risk is climbing

A research note from Barclays released this year found that 47 percent of the world’s credit card fraud happens in the U.S., despite the fact that we only represent 24 percent of the total credit card volume. This number has also grown considerably. In 2014, 31.8 million American consumers had their credit cards breached, which is more than three times the number affected during the previous year.

Why the sudden, disproportionate increase? According to a recent article on Nasdaq.com, it’s because the U.S has been slow to adopt the EMV global standard.

In many other countries, EMV-compliant cards — more commonly referred to as chip-and-PIN or chip-and-signature cards — make it much more difficult for thieves to compromise them. Indeed, the U.K experienced a 70 percent drop in counterfeit fraud between 2005 and 2013 once these cards were adopted in the country. As the U.S. is currently still in the process of adopting EMV, the results have yet to be seen in this country.

Even still, some warn that this switch will not protect against every form of identity theft. For instance, U.S. consumers are also at a high risk of “card-not-present” fraud. The most common version of this occurs during online shopping sessions. Of all the credit card fraud that occurred in the U.S. in 2014, 45 percent of it happened when a card was not present. Another 37 percent of the fraud was the result of card counterfeiting, while only 14 percent occurred as the result of a lost or stolen card.

It is possible that once EMV compliance goes into effect, the risks of ID theft will not go away, but will simply change. It is crucial for consumers to understand how identity thieves operate so they can minimize their chances of becoming victims.

In addition, consumers should be proactive about protecting themselves in the event that their personal financial information is compromised. Planning and acting quickly is the best way to control the damage before it spreads even further. For the best protection, consider signing up for a credit monitoring service that can alert you to certain activity on your credit file that may be indicative of fraud.

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