Credit Card Fraud Becoming a Mainstream Criminal Activity

by Alex Johnson 0

Credit card fraud is not only one of the most popular types of financial crime, it is quickly becoming one of the most popular crimes period. This has led William Bratton, commissioner of the New York Police Department, to make some big changes as reported by the New York Times:

“To combat these trends, Mr. Bratton said on Thursday that his department had dedicated some 250 people in a financial crimes unit to investigating such cases. It was a move, he said, that was “reflective of the growing cybercrime problem, financial fraud, identity theft problem that we’re experiencing in this city and indeed the country is experiencing.”
“We spend a lot of time and effort on it because it constitutes so much of the felony crime being committed, not just in Manhattan,” Mr. Bratton said, noting that he had met earlier in the day with the Manhattan district attorney, Cyrus R. Vance Jr., to discuss cybercrime. He added that 30 percent of the felony crime reported in Manhattan “involves financial fraud, theft, of this type.”

With mag-stripe cards still ubiquitous in the U.S. and a plethora of consumer information available for purchase in shadowy corners of the internet, the attraction of financial crime is increasing. That attraction is enticing criminals from all walks of life:

“Mr. Bratton said that such frauds increasingly involve criminal street gangs, which have been “migrating from selling drugs to the lucrative and less dangerous world of larceny, particularly by fraud, credit cards.” Those gangs brought the tactics they had relied on in hustling narcotics to their dealings with stolen credit card data.

“It is driving shootings, no question,” said Robert K. Boyce, the chief of detectives.

The conflicts arise from disputes over control of the illicit marketplace, police officials said. “We have homicides over credit cards,” Chief Boyce said. “So, it is a problem.”

Just like Wall Street’s appeal to math and science majors, credit fraud represents an economically appealing “career change” for career criminals. Hopefully the migration to EMV and the adoption of tokenization and end-to-end encryption technologies can make it slightly less appealing over time.

Overview by Alex Johnson, Sr. Analyst, Credit Advisory Service at Mercator Advisory Group

Read the full story here

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