After a year of pandemic-driven difficulty, for many this holiday season can’t come soon enough. However, while most might be looking forward to a relaxing break after a trying year, credit card scammers are gearing up for overtime and online shopping scams are projected to double during the 2020 holiday season. With the average victim predicted to lose almost $10,000, analysis by Abine/DeleteMe forecasts that consumer credit card fraud will skyrocket this holiday season.
“Online scammers are licking their lips this holiday season as more Americans shift their gift-buying online,” says Rob Shavell, CEO at Abine. Abine research indicates that instances of credit card fraud may jump by over 98% compared to the 2019 holiday season. Behind this rise in fraud are a growing range of SMS-text scams, compromised-checkout forms, COVID home-testing scams, all facilitated by the rapid growth in first-time online holiday shoppers.
Online shopping scams are increasing around the holidays
Even before the pandemic made online stores an attractive alternative to gift shopping in potentially crowded shops, the holidays were already a present for scam artists. With holiday spending making shoppers more likely to gloss over charges that might otherwise seem suspicious, frauds go unnoticed for longer. This makes going undetected an easier task for fraudsters and ultimately leads to more destructive fraud than other times of the year.
Indeed, as online shopping has grown in popularity with every holiday season, the damage caused by the average instance of fraud has increased by threefold since 2015. This growth has progressed to the point where this year, according to Abine’s research, falling victim to credit card fraud is likely to cost you $9,982 on average.
Damages Per Case Approach $10,000
However, as shoppers spend more time on websites than in stores, they can still take steps to protect themselves from credit card fraud. “The key to preventing online scammers from getting your credit card information is never giving it out in the first place,” says Shavell. He points to masked cards, a technology already used by over 10 million Americans, as a potential solution. “If you use masked cards, like the ones we built into our Blur tool, you never have to reveal your card information and can set limits for each purchase, ensuring that you stay safe from malicious actors online.”
The masked cards he refers to effectively work like “burner phones” for online shopping. Masked cards allow users to create individual, working credit card numbers with pre-set limits for each purchase. This way, the end merchant and payment processor never actually access your real card, and even if their records are hacked or compromised, your actual information is never revealed.
Because you pre-set purchase limits for each individual transaction, you add an extra level of protection against over-charges and subsequent payments that you don’t authorize. Once the purchase is made, the burner card you created essentially becomes like a used-up prepaid debit card — no further purchases are possible. If you wonder how this technology might help you stay safe from fraud this holiday season, don’t miss our demo on how to create burner cards with Blur.
Unfortunately, credit cards aren’t the only avenue that fraudsters are set to explore this winter. Additional analysis by Abine found that scams beyond credit card fraud will see similar increases this holiday season, notably “non-delivery” and “identity theft.”
Non-delivery — when a shopper is tricked into paying for goods or services they never receive — remains one of the biggest online shopping scams to consumers and has been proliferating since the pandemic began. In July this year, Interpol, the international crime prevention agency, issued a warning to its 194 member countries about rising incidences of non-delivery. If a buying opportunity seems too good to be true this holiday season, shoppers should be aware that they might never receive the item or service they ordered.
Identity theft, too, is a rising concern. Abine predicts damage per instance may reach nearly $12,000 per occurrence in 2020. As more people put more data online than ever before, identity theft becomes an easier enterprise for criminals looking to exploit leaked personal information for profit.
So while online shopping can seem like a safer option this holiday season, when it comes to credit card fraud, consumers still can’t afford to let their guard down.
Data for this analysis comes from historical reports from the FBI Internet Crime Complaint Center (IC3) and U.S. Census Data on retail spending over the last 10 years, supplemented by proprietary analysis of online shopping trends and recent reports from the National Retailers Foundation.