True Costs of Fraud
Publication Date: November 2018
With the rollout of EMV in the United States, card issuers and merchants made significant investments to reduce their respective institutions potential fraud losses resulting from counterfeit magnetic stripe fraud. As fraudsters modify their attacks and find new channels for fraud, all who participate in the payment ecosystem must remain adept and continue to adapt. All stakeholders – customers, vendors, financial institutions, and everyone in between – are impacted in a variety of sometimes underappreciated ways.
The U.S. Payments Forum Card-Not-Present Fraud Working Committee developed this white to highlight the myriad forms these impacts take and the impact they have on the various stakeholders, providing insights from different perspectives. The white paper presents three example case studies from different stakeholder perspectives to illustrate the cost of fraud. The consumer, card issuer and merchant were selected to highlight as stakeholders because they experience the most pain points in mitigating fraud risk and most measurable losses when calculating the cost of fraud.
This paper does not include monetary values. The focus of the white paper was to identify the types of cost and to present these in high-level, logical groupings. This approach allows readers to understand the overall fraud scenarios and then apply specific conditions and values that are relevant for their own use.
Additional Supporting Materials about Fraud from the U.S. Payments Forum
Fraud trends and mitigation approaches are important topics for the U.S. Payments Forum. The Card-Not-Present Fraud Working Committee has published several white papers and plans to continue development of materials to support the payments industry in the fight against CNP fraud.
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