Why credit-card scammers 'have more in their arsenal' amid coronavirus: Expert

As the coronavirus pandemic continues, credit-card fraud attempts have been rising. Javelin Strategy & Research Head of Payments Krista Tedder joins Yahoo Finance’s Akiko Fujita to discuss.

Video Transcript

AKIKO FUJITA: Well, new data points to a big uptick in attempted credit and debit card fraud during the pandemic. The Fidelity National Information Services or FIS says the volume of fraudulent transaction attempts rose 35% in April from a year ago. Let's bring in Krista Tedder. She is with Javelin Strategy and Research. She's the head of payments there.

Krista, you know this is I guess not surprising when you think about, you know, criminals sort of look to go after some of the most vulnerable. But what have you seen that you think is different this time around, in terms of how some of these credit card holders are being targeted?

KRISTA TEDDER: So the pace of it is significantly higher than what we've seen even in the previous recession. So criminals generally thrive on chaos. And there's nothing like this right now. So because payments are now digital, they have more in their arsenal that they can begin stealing.

Last year $16.9 billion in the United States was lost to identity fraud. And so we're really expecting to see that increase. They're able to take more money in fewer attempts now, because of how they are perpetrating their fraud. And

AKIKO FUJITA: Krista, I imagine there's so much more traffic online, too. You know so much of us have relied on everything online, whether it's grocery deliveries, you know, purchases on Amazon. You know, how much of that traffic has kind of been ripe for this kind of fraud?

KRISTA TEDDER: It really has made it really difficult. And the bank and the merchant industry have been using analytics to identify what is abnormal behavior for a long time. And right now because everything is abnormal, you cannot go to brick and mortar stores, it is actually changing how they're able to detect and identify the fraud.

So they have to approve more transactions, because they don't want to have that negative impact of their customer trying to buy groceries. However, in fact, it is someone who's perpetrating fraud. So it makes it harder to find.

AKIKO FUJITA: So having said that, what can consumers do to protect themselves right now?

KRISTA TEDDER: So there's a lot of things that we have within our control that we might not think about. For example, digital wallets, if you think of Apple Pay and Google Pay, Samsung Pay, it is a way where you can store your payment information and either use it in a merchant app. You can use it in the wallet. You can use it in the browser.

And it prevents your need to put your payment information, your personal information all over the web. And the connectivity really makes it so that it's secure. The merchant never receives your details. And it really keeps your information private, as well as secure, reducing the risk of fraud.

AKIKO FUJITA: How much of the risk do you think now increases not just because of online but, you know, so much of us are looking to sort of touchless? We want to use cards that-- before we used a chip. But nobody wants to touch surfaces right now, so they're looking for the quickest and easiest way of payment. How much of those products are actually protected?

KRISTA TEDDER: They're very much protected. They use--

AKIKO FUJITA: I guess is there enough protection, I guess, is the question here. Because suddenly we've seen a huge spike in that direction.

KRISTA TEDDER: The challenge is the fact that not every merchant is capable of accepting that. And as long as there's the weak links, where there's not 100% acceptance, there will always be risk. So you will see criminals taking advantage of gas stations, because they don't have it. The technology is very safe and very secure.

Using either the plastic card or your digital wallet, you could use your fitness band or your watch as well. The more digital the device, the more secure it is.

AKIKO FUJITA: And finally seeing just how quickly credit and debit card related frauds gone up in the last two months, are there any new trends that you think consumers should be looking out for on how they could be targeted?

KRISTA TEDDER: They can be targeted by phishing, what we call phishing attacks. And really there's a lot of text message phishing. So for example, I received a text message saying, click-- click the link for my rewards value off of Amazon. The criminals are taking advantage that people use Amazon.

And they're hoping that you click the link. By clicking the link, they can then install what we call malware and takeover either your device, get your personal information, or even hold your phone for ransom.

AKIKO FUJITA: OK. Krista Tedder joining us from Javelin Strategy and Research, some good insight there.