FICO Labs: California, Florida and Northeast Were Hotspots for ATM Fraud in 2012
Latest research finds credit card fraud climbed in 20 states
SAN JOSE, Calif. - -FICO (NYSE: FICO), a leading predictive analytics and decision management software company, today released data showing which states were hardest hit by ATM compromises across the U.S. last year. FICO Labs data also showed that 20 states saw an increase in credit card fraud, including several along the East Coast.
An interactive map showing debit card and credit card fraud trends is available at ficousfraudmap.com.
Nearly half (46 percent) of all card skimming reported by the FICO® Card Alert Service occurred at bank ATMs, while 36 percent took place at retail point-of-sale (POS) terminals, and 18 percent occurred at white-label ATMs – machines not operated by banks. These results were significantly different from the data observed in 2011, when 79 percent of skimming incidents occurred at POS terminals, due largely to a multi-state crime ring that was identified by the FICO® Card Alert Service.
“The prevailing fraud scheme has been ATM skimming because that only requires a PIN, not a signature – a finding that is clearly reflected in the map,” said John Buzzard, who manages the FICO Card Alert Service, which analyzes more than 65 percent of all ATM transactions in the U.S. each day. “Skimming at bank-owned ATMs and white label/off-premise ATMs increased in 2012, and California, Florida and the Northeast were hit particularly hard.”
In its data concerning credit card fraud, FICO Labs found increases in 20 states, including 7 states on the East Coast: Maine, Massachusetts, New York, North Carolina, Pennsylvania, Vermont and Virginia. The state with the largest increase in credit card fraud was South Dakota, where the rate jumped nearly 26 percent.
“Fraud continues to be problematic and we must remain vigilant about protecting credit cards and bank accounts, but the good news is that innovative technologies are making it increasingly difficult to commit payment fraud,” said Doug Clare, FICO’s fraud chief. “In the 21 years since FICO Falcon Fraud Manager brought real-time fraud detection to the marketplace, the losses on U.S. credit cards, as a percentage of credit card sales, have been cut by more than 70 percent. It’s important to keep that in mind despite year-to-year fluctuations in fraud activity.”
The FICO Labs research is based on debit card data from the FICO® Card Alert Service, and credit card data from the FICO® Falcon® Fraud Consortium, which is used to develop models for FICO® Falcon® Fraud Manager. The FICO Falcon Fraud Consortium comprises data from more than 2.5 billion active credit and debit payment cards, sourced from issuers worldwide.
FICO (NYSE:FICO) delivers superior predictive analytics solutions that drive smarter decisions. The company’s groundbreaking use of mathematics to predict consumer behavior has transformed entire industries and revolutionized the way risk is managed and products are marketed. FICO’s innovative solutions include the FICO® Score — the standard measure of consumer credit risk in the United States — along with industry-leading solutions for managing credit accounts, identifying and minimizing the impact of fraud, and customizing consumer offers with pinpoint accuracy. Most of the world’s top banks, as well as leading insurers, retailers, pharmaceutical companies and government agencies, rely on FICO solutions to accelerate growth, control risk, boost profits and meet regulatory and competitive demands. FICO also helps millions of individuals manage their personal credit health through www.myFICO.com. FICO: Make every decision count™.
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