Application fraud explodes to the detriment of CUs & members
Total losses for the year 2017 due to application fraud are $1.7 billion.
The number of victims of fraudulent card accounts almost doubled between 2016 and 2017, and that may be brewing bad blood between members and card issuers, according to a study by FIS and Javelin Strategy & Research.
The survey of 5,000 people found that the number of people who’ve had a criminal open a fake account in their name rose from 0.9 million in 2016 to 1.6 million in 2017. Total losses for the year due to application fraud were $1.7 billion.
Criminals have also shifted their attention toward debit and prepaid cards, according to the study. Last year, about 3.4 million people “lost control” of their prepaid cards — nearly triple the number in 2016. Debit card victims numbered 6.6 million in 2017, up about 27% from 5.2 million in 2016.
The trend could do serious damage to the relationship between cardholders and card issuers such as credit unions or other financial institutions, it noted.
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