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2021 Annual Study: Identity Theft & Credit Card Fraud Has Exploded in Recent Years

Updated Sep 09, 2021 | Published Feb 10, 20207 min read

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At a glance

Recent trends point to a rise in credit card fraud, which can be costly to consumers and taxpayers alike. Protect yourself by learning about the most recent trends in fraud.

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Reports of identity theft and credit card fraud have skyrocketed in recent years. To best protect your credit, it’s important to understand the main sources of credit card fraud in the U.S. and how they have changed over time. When armed with the facts, you can turn the fear of fraud into knowledge that can keep you safe from becoming a victim.

This annual study highlights the growth of credit card fraud from various sources, the cost of fraud to consumers, businesses, and the government, and tips to stay safe from fraud.

Key Findings

  • Government documents and benefits fraud jumped 3,883% between Q1 and Q4 2020 according to the FTC. With over 235,000 reports in Q4 alone, this type of fraud overtook credit card fraud as the most common type of identify theft. The data coincides with a year stricken by a pandemic and filled by those affected by unemployment.

Image credit: FTC

  • The same FTC report shows credit card fraud continues to be one of the fastest-growing forms of identity theft. Reports of credit card fraud jumped by 107% from Q1 2019 to Q4 2020. To put this rapid growth in perspective, the number of card fraud reports between Q1 2017 and Q1 2019 grew by only 27%. The opening of new credit card accounts was the second-most reported type of credit card fraud in 2020, with 393,000 cases reported. This is an increase of 60% from 2019’s 246,000 cases reported.
  • Using funds recovered in fraud cases, the FTC returned $483 million to victims of fraud and identity theft in 2020, an increase of 108% from 2019’s $232.2 million. In total, the FTC has returned an astonishing $11.1 billion since July 2018 to consumers who were victims of some type of fraud. The FTC cannot always get back every dollar lost by victims, and cannot always get money back in every lawsuit they file with fraudsters. Even with refunds, consumers can find themselves footing part of the bill when it comes to fraud and scams.

Cost of Fraud

Fraud and identity theft are not only costly to the victims, but also to banks and payment networks that issue refunds to consumers. Government agencies, such as the FTC, also expend significant resources to investigate and litigate fraudulent companies so that victims can recover some or all of their money.

The amount of money lost by victims can vary greatly depending on the method of fraud, the creditworthiness of the victim, and even the age of the victim. In 2020, victims aged 80 and over only accounted for only 18% of reported cases that involved a dollar loss, but lost an average of $1,300 per case, the highest average of any age range.

Image credit: FTC

The highest percentage of total fraud reports, 18%, came from those aged 60–69. This age range lost a total of $290 million to fraud and identity theft in 2020 alone, the highest total for any age range. Aging populations should continue to stay alert as they shop online or answer the phone.

Image credit: FTC

The cost to fraud victims is not only the immediate financial loss — victims of fraud and identity theft could also be stuck dealing with inaccurate credit reports and tarnished credit scores, loss of time dealing with creditors and agencies while trying to clear their names of fraud, and frustration in having to place additional security measures on credit reports to prevent further damage.

Mitigating the Cost of Fraud

When fraudulent charges appear on your credit card, you can file a dispute with your card issuer. Fraud on credit cards is regulated by the Fair Credit Billing Act (FCBA) and caps the liability for cardholders at $50. Most credit card issuers go above and beyond by offering zero liability for the cardholder, meaning the issuer will refund the entire amount of a fraudulent charge.

This differs from fraud reported on a debit card, which could leave the cardholder on the hook for more money. Debit card fraud is regulated by the Electronic Funds Transfer Act, and fraud victims could be liable for between $50 and $500 of the fraud amount, depending on how soon they report the fraud. Many banks will also go above and beyond by covering 100% of fraud, but it’s important to know the difference between debit and credit cards when it comes to fraudulent transactions, because these situations may be handled differently.

Staying Safe From Fraud

The Basics

The FTC’s data demonstrates the importance of following best practices to keep your identity and card information safe. With new accounts making up such a large percentage of credit card fraud reports, it’s important to guard the information that can be used to open a new account, including your:

  • Social Security number
  • Annual income
  • Cost of rent or mortgage
  • Other personal information such as date of birth, credit freeze PINs, etc.

Going beyond protecting yourself from new account fraud, it’s important to be aware of common scams to capture your existing payment information to be used fraudulently.

Card skimmers on websites and in person can give a thief your card number and information, allowing it to be used for online purchases or cloned onto a physical card. Phone scammers may pretend to be a government agency or even your bank, demanding payment information to settle a debt or asking for your card information to “secure your account.” Even if the caller ID says it’s a legitimate agency, you shouldn’t give out information to anyone over the phone, especially on an unsolicited phone call.

Scammers may also send fake emails to you in order to get your login information to important sites such as your bank or an online store like Amazon. If you can, turn on two-factor authentication and never give a security code out to another person.

The most prevalent types of fraud from 2020 and in 2021 include:

  • Social Security scams
  • Imposter IRS scams
  • COVID-19 vaccine and relief scams
  • Phishing scams
  • Fake check scams
  • posers
  • Job offer scams
  • Rent or mortgage relief scams Harnessing Modern Security Technology

The FTC announced and released a new fraud reporting tool in October 2020. If you experience any type of fraud or identity theft, please report it to the FTC.

Some card issuers are offering modern solutions to online card security. Virtual credit cards, also called virtual account numbers, are unique credit card numbers that you can use to protect your actual account information. When you use your credit card number online, a virtual credit card can prevent a thief from getting your actual card information. Even better, some virtual card numbers are one-time-use, so even if a thief were to obtain the card number, it wouldn’t be a carte-blanche to rack up debt in your name.

The following issuers offer virtual credit cards:

With online fraud so prevalent, tools such as virtual card numbers can help keep you safe. You can also use a payment service such as PayPal, which pays the merchant directly and offers fraud protection on many transactions. If a transaction ends up being fraudulent, you can dispute it with PayPal, and the fraudulent merchant won’t have access to your actual payment information.

Monitoring Your Credit

Whether you’ve already been a victim of identity theft or you just want to be proactive about staying safe from fraud, it’s a good idea to keep an eye on your credit. You can obtain one credit report from each bureau once per year for free thanks to the Fair Credit Reporting Act. When checking your reports, look for errors or accounts that you don’t recognize.

A handful of credit card issuers and other services offer free credit scores. If you notice any unexpected changes in your credit scores, you can look into your reports further to see if any fraud has occurred.

Insider tip

If you’re worried about your sensitive information being out in the open, take advantage of a free dark web scan from Experian or Discover (if you’re a cardmember).

You can also place a security freeze on your credit reports, even if you haven’t been a victim of fraud or identity theft. This will require you to unfreeze your credit reports with a PIN number any time you want to apply for credit products such as a credit card or auto loan. You’ll need to freeze and unfreeze your reports with each of the three credit bureaus, but this can be done quickly online.


Combining the data above with our own observations on fraud and credit card security, we’ve drawn two key conclusions.

Education Is Fundamental

First, while security technologies are evolving, fraud tactics are responding in kind, as highlighted by ever-growing fraud numbers. Learn about fraud as it evolves over time. The red flags that signal fraud will change as security measures advance and identity thieves change their tactics to keep up.

Staying educated also means you should be taking advantage of the security features offered by your financial institutions. Check with your card issuer to see if they offer features you’re missing out on, such as two-factor authentication at login or a virtual credit card number. Finally, it’s important to know when something’s wrong by knowing what your accounts should look like. Check your account statements often and pull your credit reports on a regular basis.

Online Fraud Is a Real Threat

Data trends show a high amount of online fraud, which may necessitate a change in approach to how consumers navigate the web as a whole. As you learn about the newest online fraud techniques and understand how to spot them, you might consider changes to your behavior online. Choosing secure, unique passwords is a good start. Stick to well-known sites that you trust, and remember that if a deal seems too good to be true, it just might be.

Ranked: Identity Theft Reports by State and Percentage Increase From 2019

State 2020 Reported Cases Percentage Change From 2019 State 2020 Reported Cases Percentage Change From 2019
Kansas 43,211 1801.89% Oregon 7,432 85.48%
Rhode Island 12,621 1002.27% New York 67,202 84.93%
Maine 7,183 787.89% Missouri 13,653 84.33%
Washington 54,247 662.86% Minnesota 8,246 83.29%
Illinois 135,038 483.52% Texas 134,788 83.24%
Massachusetts 45,575 429.51% Michigan 24,370 80.08%
Arkansas 17,470 286.16% Tennessee 19,182 79.76%
Oklahoma 13,797 272.29% Wisconsin 8,986 78.90%
Montana 2,439 245.47% South Carolina 19,193 76.94%
Colorado 20,762 230.92% New Hampshire 2,301 76.59%
Alabama 17,376 205.93% New Jersey 32,125 76.30%
Nevada 22,801 193.75% Alaska 926 71.80%
Hawaii 3,835 185.13% Idaho 2,353 65.70%
North Dakota 1,266 182.59% New Mexico 3,454 65.42%
Wyoming 875 175.16% Nebraska 2,182 65.30%
Indiana 17,306 171.04% Maryland 20,718 63.42%
Arizona 27,661 157.24% North Carolina 30,176 62.36%
West Virginia 2,646 149.39% Pennsylvania 33,886 62.06%
Vermont 810 139.64% Iowa 3,022 58.14%
Mississippi 11,048 134.37% Florida 101,367 56.31%
Louisiana 21,976 107.65% Georgia 69,487 54.79%
Delaware 4,374 100.00% South Dakota 637 54.61%
Utah 9,366 99.11% Virginia 15,632 51.94%
Kentucky 5,693 91.17% Connecticut 6,821 49.35%
Ohio 25,893 87.79% California 147,382 45.04%


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Written by

Jacob Lunduski

Jacob uses his years of experience in the credit-information space to follow the latest trends in the credit card industry and identify the topics that are most important and helpful to readers. The surveys and original research he conducts help capture the pulse of consumers' relationships with credit. He leads projects to improve the website based on reader feedback and experiences, supporting his mission to help people build and use their credit responsibly.

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