November 24th, 2008
Ho, Ho, Ho: Credit Card Fraud Not A Holiday Killer. Unless You Get Hit.
A recession is when your neighbor gets laid off. A depression is when you get terminated. With credit cards, fraud is not a big deal. Unless it’s your number that’s for sale, online.
A Symantec report says the underground economy is booming. The total value of goods and services was “more than” $276 million. The most popular stuff: Bank account credentials and credit cards that have CVV2 security codes with them.
But bank account credentials can be had for as little as $10. Credit cards with security codes? As little as 10 cents, up to $25 each.
What does the thief get?
Symantec figures the average balance per credit card at $4,000, yielding a potential spend of $5.3 billion. Average bank account? $40,000, yielding a potential spend of $1.7 billion.
All told, about $7 billion of money to spend. If you’re willing to go underground and get it.
That’s not chump change — if the sellers can get buyers to cough up the $276 million to buy $7 billion of purchasing “power.”
But it’s not a holiday killer. Online merchants are likely to pull in $32 billion of sales this Christmas, Hannukah and general gift-giving season, according to eMarketer. And Nielsen, at least as of October 9, was still predicting in-store sales this holiday season to rise 4.7% to $98 billion. Unit sales may be flat, but dollar sales will be up, the research firm said.
So even if every one of the 1.3 million credit cards and 42,500 bank accounts at risk, by interpolating Symantec’s numbers, are purchased and exploited to the full, that would only pump up the holiday season another 5%.
Until the sales got reversed by complaining card and account holders and start to wipe out merchants’ earnings.
Tom Steinert-Threlkeld is editor-in-chief of Securities Industry News, as well as a long-time media, technology and business journalist. See his full profile and disclosure of his industry affiliations.
Subscribe to Between the Lines via Email alerts or RSS.
