Credit card fraud victims more likely to recover losses

While 7.5 percent of Americans fell victim to financial fraud in 2008, those who had money stolen from credit and debit cards were more likely to recover their losses, according to a March 4 survey by technology research company Gartner.

The survey also revealed that the most common cause of fraud for American adults in 2008 was data security breaches. A study by the Identity Theft Resource Center says the total number of reported breaches was 656 in 2008 — an increase of 47 percent from 2007. While 20 percent of the 5,000 surveyed in Gartner’s study traced their losses to data breaches, 53 percent pointed toward other types of theft such as phishing, Internet auction fraud, or their wallets, purses, or mail being stolen. More than 20 percent of respondents conceded they did not know how their money was stolen.

Credit card theft victims, however, recovered 86 percent of their stolen funds, while debit and ATM card victims recovered 77 percent of their losses. Gartner reports that financial recovery from payment card theft fared better due largely to increased consumer protections for electronic payments

A report released by the Federal Trade Commission on Feb. 26 also displayed that complaints about credit card fraud dropped for the sixth year in a row. New-account fraud — where financial information is stolen to open a new account — decreased 13 percent, but Gartner warned this type of fraud could have long-term damages on credit ratings that could take years to restore.

Gartner’s report showed that after discovering theft, fewer than one in three victims reported the crime, while more than 71 percent responded by changing their purchasing behavior due to security concerns

See related:Debit versus credit: Which offers more protection?, Don’t take the bait when you receive a ‘phishing’ e-mail