Most people experience this scenario: Your credit card gets declined when you try to make a big or unexpected purchase.
Sometimes, you just need to confirm the purchase with a text message to complete it quickly. Other times, you have to go through a long process of confirmation codes, mailed letters, and waiting on hold with the card company to confirm that it was really you making the purchase.
According to Deloitte U.S. risk & financial advisory principal Satish Lalchand, the rate of fraud alerts is going up and many of them are not false alarms. About 60% of credit card holders experienced attempted fraud in 2023, as reported by Experian.
Fraud across all payment channels is increasing rapidly. Global card losses due to fraud reached $33 billion in 2022, with the U.S. market accounting for approximately 40% of these losses. It is estimated that card fraud could reach nearly $400 billion by 2032.
Fraudsters are using AI to commit fraud much faster now compared to before. They can open hundreds or even thousands of accounts in a day, thanks to advancements in AI technology.
Financial institutions are investing more in fraud detection capabilities and alert systems to combat this rise in fraud. AI is being used to detect potentially fraudulent transactions based on patterns from previous behavior.
Experian reports that the rate of false purchases on credit cards is decreasing. Mastercard has observed a 20% increase in fraud detection and up to 300% increase in fraud detection without false alerts, thanks to AI.
Mastercard recently acquired a payment fraud company to help identify compromised cards and reduce fraud. Technology has made it easier to identify and clear flagged fraud alerts quickly, reducing the need for customers to call and wait on hold.
To avoid unnecessary fraud alerts, you can monitor your shopping patterns and set limits on your accounts. Sign up for monitoring services and use two-factor authentication to protect your accounts from fraud. It’s important to pay attention to fraud alerts and not ignore them, as it’s only a matter of time before you may be impacted by fraud.
Read More
Donald Trump says no to another US debate