Consumers Increasingly Shoulder Burden of Sophisticated Fraud Schemes, According to 2019 Javelin Str
Out-of-Pocket Fraud Costs for Victims More than Double in 2 Years; Experts Warn That Sophisticated Fraud Attacks to Continue
SAN FRANCISCO, March 6, 2019 – The 2019 Identity Fraud Study, released today byJavelin Strategy & Research, reveals that complex and sophisticated fraud types remain at elevated levels, despite widespread adoption of anti-fraud measures. The recent shift to EMV (embedded chip) cards is helping to contain existing card fraud, which showed the steepest decline of any fraud type in 2018. While existing card fraud losses dropped from $8.1 billion in 2017 to $6.4 billion and the incidence fell from 5.47% to 4.40%, high-impact fraud types like account takeover and new-account fraud remain alarmingly common, demonstrating that fraudsters continue to find and compromise new targets.
14.4 million consumers fell victim to fraud in 2018. This represents a notable drop from the record-breaking 16.7 million victims in 2017. But victims in 2018 shouldered a much heavier burden than those in recent years: 3.3 million victims bore some of the liability for fraud, nearly three times as many as in 2016, and victims’ out-of-pocket fraud costs more than doubled in two years to $1.7 billion in 2018.
“While the decrease in card fraud rates is undoubtedly good news for victims, fraudsters have turned their attention to opening and taking over accounts,” said Javelin Strategy & Research Senior Vice President, Research Director and Head of Fraud & Security Al Pascual. “As financial institutions and other organizations modernize account opening processes, it’s paramount that they incorporate tools like document scanning, behavioral risk assessments and digital identity. This will streamline digital applications while challenging fraudsters.”
The study found that overall fraud incidence and fraud losses declined in 2018, from 6.64% to 5.66% and from $16.8 billion to $14.7 billion, respectively. The occurrence and losses due to account takeover decreased year-over-year from 1.58% to 1.43% and from $5.1 billion to $4.0 billion, although levels remained much higher than prior years.