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Cost of card fraud rises to $40bn a year

Card fraud is taking an increasingly high toll on the industry, according to research from  Oakhall. The cost of fraud rose by 29% in 2015 to $40.1 billion, driven by a continued use of cards, more online shopping and the increasing sophistication of fraudsters.

In 2015, costs associated with incidents of card fraud increased 34% to $21.8 billion and fraud-related costs associated with genuine transactions declined, increased 24% to $18.3 billion. 80% of card fraud in the UK happens in “card not present” transactions, where existing systems will often decline genuine transactions, annoying customers.

Oakhall estimates that global financial services firms could save at least $15.8 billion by employing “adaptive, machine learning fraud prevention software”. Meanwhile, only 6% of customers think that they should cover the cost after a fraudulent attack, with just under half expecting the bank to take responsibility for the payout. Research from Kaspersky Labs last year found that 30 per cent of consumers feel that the online transaction vendor (including PayPal or Apple Wallet) should be responsible. Around a quarter of respondents simply didn’t know who should pay out.

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