Coronavirus Has Mitigated the Number of Credit Card Frauds
Credit card fraud fell during the COVID-19 pandemic because consumers stopped visiting brick-and-mortar stores, where fraudsters use skimmers and shimmers attached to payment terminals to steal card data for sale on the dark web. Cybersecurity firm Sixgill credited the drop to reduced in-store card use, alongside Russian law enforcement closing dark web markets and shutting down almost 90 websites in March 2020.
Scope: For merchants and consumers interested in how the pandemic-era shift away from in-store card payments affected credit card fraud.
An Unexpected Upside of the Pandemic
Coronavirus changed everything. Everything has a positive as well as a negative aspect, and this is not an exception. It is a fact that the coronavirus pandemic flattened the growth of small retail business — but on the other side, it reduced the number of credit card frauds.
The main reason behind this good news is the pandemic itself. Because merchants were unable to keep their businesses open, consumers did not have as many opportunities to purchase new things in person.
Why In-Store Fraud Dropped
According to research, brick-and-mortar retail outlets are the platforms where credit card fraud remains high. This is where fraudsters steal credit card account information and sell it on the dark web.
Sixgill, a B2B cybersecurity company, points to the physical devices involved in this process, such as skimmers, otherwise known as shimmers. Scammers generally attach these devices to payment terminals such as credit card machines and point-of-sale systems.
Due to the pandemic, where consumers had to maintain social distancing, people stopped visiting retail outlets — and that reduced credit card fraud. People shifted importance to online transactions, so the overall number of in-person credit card transactions stayed low.
Law Enforcement Turned Up the Pressure
Sixgill also acknowledged the efficiency of law enforcement during this period.
According to a report, Russian law enforcement closed many dark web markets in March 2020. They made many arrests and, along with that, shut down almost 90 websites.
The Online Shift and What It Means for Card Fraud
The report says the coronavirus pandemic had not yet played an impactful role in overall credit card usage. Offline merchants made an online shift, and customers kept making online purchases.
But the shift reduced the number of opportunities for cyber criminals to steal credit card details in person. They were unable to make a clone or copy of credit cards because customers were not using them at physical payment terminals.
Frequently asked questions
Why did credit card fraud decrease during the COVID-19 pandemic?
Because consumers stopped visiting brick-and-mortar stores, fraudsters lost access to their main tool: skimmers and shimmers attached to physical payment terminals. With fewer in-person card transactions, criminals could not clone or copy cards at the same rate.
What are credit card skimmers and shimmers?
They are physical devices that scammers attach to payment terminals such as credit card machines and point-of-sale systems. The devices capture card account information, which fraudsters then sell on the dark web.
What did law enforcement do about dark web card fraud in 2020?
According to a report cited by Sixgill, Russian law enforcement closed many dark web markets in March 2020, made many arrests, and shut down almost 90 websites, adding pressure on card fraud operations.
Did the pandemic change how people used credit cards?
The report says the pandemic had not yet made an impactful change in overall credit card usage, but offline merchants shifted online and customers made more online purchases, which reduced in-person opportunities for card data theft.
