Noncash payments fraud is on the rise: Fed study

WASHINGTON — Growth in fraudulent noncash payments in the U.S. outpaced growth in noncash payments overall from 2012 to 2015, according to a study by the Federal Reserve Board.

But the study found that the increase in payments fraud is still just a small fraction of overall payments. That increase was primarily driven by card fraud, the study said.

“Card payments fraud, at less than one-tenth of a percent of all card payments, is rare, and also represents a small fraction of the value of card payments,” the Fed said in a press release Tuesday accompanying the report.

The study found that the value of noncash payments fraud rose 37% from $6.1 billion in 2012 to $8.3 billion in 2015. The total value of noncash payments rose 12% from $161.2 trillion to $180.3 trillion over the same period, according to the study.

The data on fraudulent payments was collected as part of the Fed’s surveys of depository institutions in 2012 and 2015 and payment card networks in 2015 and 2016, in collaboration with the Federal Reserve Bank of Atlanta.

Despite the increase in payments fraud from 2012 to 2015, the Fed survey found that the rate of card fraud was nearly flat from 2015 to 2016, with the rate of in-person card fraud “decreasing notably” and the rate of remote card fraud “increasing significantly.”

The survey found that the value of fraudulent card payments and ATM withdrawals rose from an estimated $4 billion in 2012 to $6.5 billion in 2015.

Card fraud accounted for more than three-fourths of noncash payments fraud in 2015, up from less than two-thirds in 2012. Check fraud, on the other hand, fell from $1.1 billion in 2012 to $710 million in 2015.

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