One particular type of scheme, swapping, involves thieves stealing and replacing cards before the consumer is aware, says The ai Corporation’s James Crawshaw.
Last year we witnessed dramatic changes to the ways we work, socialize and consume. For those of us who work in payments, one major change happened rapidly, namely the widespread switch from cash to card or e-wallet payments, particularly contactless payments. While experts stated that transmission of the COVID-19 virus through notes and coins was minimal, many consumers and retailers decided it was not worth the risk and pivoted to using their bank cards and phones to make everyday purchases. In the UK, card payments were 75.3% higher in early April 2020, compared to the same period in 2019; while contactless payment limits also rose to $100, making the switch to contactless even more appealing. Unfortunately, this rapid change has been overshadowed by increased levels of fraud, and, according to our research, one of last year’s most noticeable trends was the rise in swapped card fraud. Swapped card fraud is the act of stealing a card, then replacing it, so that the victim is unaware that anything is amiss. Usually, the stolen card is replaced by either a counterfeit card or another stolen card. Interestingly, national lockdowns created a unique situation where card transactions have increased, but card present transactions have “temporarily” decreased, with levels of fraud mirroring those payment preferences. In the consumer market, we have yet to see whether swapped-card or indeed all card-present fraud levels will rise again as restrictions begin to be lifted. However, what we can say with confidence is that swapped card fraud has and will continue to affect specific card industries.
