Which credit cards are least likely to receive a fraud complaint?

Which credit card companies are least likely to receive a fraud complaint?

With identity theft rampant, finder.com analyzed 20 of the largest credit card companies to identify which handles it best

The honest stats on fraud

Today, credit card fraud has become just about as common as the flu. According to a Nilson Report, the amount of fraud in the US has more than doubled from 2000 to 2015, going from 5.57 cents to 11.76 cents in fraud for every $100 charged on a credit card. Finder.com forecasts the fraud rate will increase by another 6%, reaching 13.48 cents per $100 by the end of 2017.*

Turns out all of those missing cents can add up to a staggering total. Fraud is projected to total $8.6 billion for 2017. Like getting sick, you can take the necessary precautions — keep your information private, regularly check your credit report — and still get hit by a fraudster.

How does all this identity theft happen?

Credit card thieves take advantage of three main types of credit card fraud.

  • Lost or stolen cards. The oldest trick in the book still works. Scammers grab your physical credit card or your statements from your mail. They then use your personal information to order new cards, make Internet purchases with your card in hand or withdraw cash with “checks” intended for promotional programs. The proportion of fraud that occurs this way holds steady between $800 million to $900 million.
  • Card not present (CNP). For the thief, this is the safest and simplest method. It includes unauthorized purchases that occur on a phone order, the Internet and even through traditional mail order catalogs. Servers at restaurants and desperate family members can grab your digits and potentially use them to go on a shopping spree. This is the most common way credit card fraud occurs and with online shopping increasing, it will only grow. Statista projections expect CNP to grow by 37% from 2016 to 2017.
  • Counterfeiting. Also called “account takeover” or “new account fraud,” this type of fraud is the most invasive. Scammers obtain so much of your information, they can report your card lost or stolen and order a new one — starting a new account. The perpetrator requests a change of billing address and gets the new card sent to the alternate address. Victims are increasingly receiving phone calls from scammers posing as credit card companies, debt refinancers or the government to obtain credit card and personal information. This method includes skimmers that manipulate credit card machines with electronic attachments to collect your private information. They may use this information themselves or sell it on the black market so that others can take over your account.

    Customer service matters

    Because identity theft is so common, you want to choose a bank that can handle the situation easily and promptly. Credit cards have the most fraud protection when compared with debit cards or PayPal. Covered by the Truth in Lending Act, consumers’ maximum liability is $50 for unauthorized transactions — $0 if online. Your financial institution is required to rectify the fraud.

    Third-party watchdog organizations like the Consumer Federal Protection Bureau (CFPB) collect complaints from consumers when banks don’t hold up their end of the bargain. To measure which credit card issuers are handling fraud best, finder.com analyzed data from the CFPB to learn which providers have the least number of fraud complaints.

    Top 10 credit card companies least likely to receive a fraud complaint in 2016

    Consumers filed more than 89,000 credit-card related complaints with the CFPB from December 2011 to July 2017, and 9.5% of them were categorized under identity theft, fraud or embezzlement. We considered 20 of the most used credit card companies based on the Nilson report of purchase transactions in 2016. We then divided the number of fraudulent complaints made to the CFPB in 2016 by the number of purchase transactions — credit transactions rather than cash advances — made in that same year. To better work with the figure, we multiplied it by 100 million to determine the number of complaints per 100 million transactions. We then took the 10 companies with the lowest complaint rates for our ranking.

    Rank Banks CFPB complaints per 100 million transactions in 2016 Closed with explanation* Closed with relief* Closed with no explanation or relief* Timely response* Consumer disputed*
    1 ALLIANCE DATA CARD SERVICES 1.21 38.46% 61.54% 0.00% 100.00% 15.38%
    2 AMERICAN EXPRESS CENTURION BANK 2.79 59.15% 35.74% 5.11% 100.00% 20.64%
    3 REGIONS BANK 3.29 28.57% 57.14% 14.29% 92.86% 21.43%
    4 CITIZENS FINANCIAL GROUP, INC. 3.62 64.71% 23.53% 11.76% 100.00% 23.53%
    5 NAVY FEDERAL CREDIT UNION 4.20 80.43% 15.22% 4.35% 100.00% 10.87%
    6 JPMORGAN CHASE & CO. 4.32 73.82% 19.53% 6.65% 99.28% 23.21%
    7 U.S. BANCORP 4.92 63.97% 30.77% 5.26% 100.00% 22.67%
    8 PNC Bank N.A. 5.21 76.60% 2.13% 21.28% 97.87% 14.89%
    9 FIRST NATIONAL BANK OF OMAHA 5.51 73.91% 19.57% 6.52% 100.00% 26.09%
    10 BANK OF AMERICA, N.A. 5.58 68.22% 25.06% 6.72% 97.07% 22.98%

    *Percentages from credit card complaints categorized as “Identity theft/Fraud/Embezzlement” received since CFPB started receiving complaints in December 2011 to April 2017, before complaints were recategorized.

    1. Alliance Data Card Services. With 1.21 complaints per 100 million transactions in 2016, Alliance Data is the credit card issuer least likely to receive a CFPB fraud complaint. They may not be a household name, but the brands they represent are: Pottery Barn, J. Crew, Caesar’s Entertainment and Victoria Secret are just some of the store cards behind Alliance Data. Big brands work with this provider because of its expert account representatives that provide hands-on help and consumer-focused attention when it comes to protecting you from fraud. As a result, even the handful of complaints the CFPB has received since December 2011 are met with a 100% timely response rate, and none have been closed without explanation or relief. Priding itself on customer service, Alliance Data seems to actually walk the talk.

    2. American Express Centurion Bank. The card with the gladiator is known for its cardholder perks and customer service. Turns out, this applies to handling and preventing fraud. American Express is the second least likely credit card company to receive fraud complaints, with 2.79 complaints per 100 million transactions in 2016. This is despite having the largest purchase volume at $674.67 billion charged on its cards. American Express may not as widely accepted, but perhaps that’s a good thing when it comes to fraud: It’s responded on time to 100% of its CFPB credit card fraud complaints since December 2011.

    3. Regions Bank. Regions Bank comes in third with 3.29 complaints per 100 million purchase transactions. Although one of the smaller banks on this list, it services 15 states including Texas. Its size allows it to provide award-winning personal service across all channels in person and online — Facebook and Twitter included. Of all the credit card fraud complaints submitted to the CFPB, it have the second highest percentage of complaints that received some type of relief and the most closed with monetary relief.

    4. Citizens Financial Group, Inc. Commonly known as Citizens Bank, our fourth-place winner lives up to its name with 3.62 complaints per 100 million purchase transactions. It’s been in business since 1828 — almost 200 years — focusing operations in 11 states that are mostly in the Northeast. It’s responded to 100% of its complaints on time since the CFPB started collecting complaints, and it calls out its zero-liability protection policy and security online, reminding consumers of their rights.

    5. Navy Federal Credit Union. Founded in 1933 with only seven members, Navy Federal Credit Union now comprises nearly 7 million members and more than $80 billion in assets. Despite exponential growth, NFCU has managed to keep to its roots as a family-oriented credit provider. The credit union’s purchase volume of $16.44 billion spent on its credit cards speaks to the trust and faith it’s built with the military and their families. That, combined with its numerous protective measures, earns NFCU 4.20 CFPB complaints per 100 million transactions, landing them at the fifth spot on our top 10 credit card companies least likely to receive fraud complaints. Furthermore, of all its complaints since the CFPB began, it had the lowest percentage of complaints disputed by consumers after NFCU responded — which they responded to punctually 100% of the time. The credit union uses identity verification, online data encryption, e-statements and special discounts with Equifax.

    6. JPMorgan Chase & Co. Founded in 1799, JPMorgan Chase & Co. has rebranded itself as a credit card service for the young, but it hasn’t lost its centuries of experience and know-how. It had only 4.32 complaints per 100 million purchase transactions, making it the sixth least likely provider to receive fraud complaints. That’s quite a feat, considering it also processed 6.53 billion purchase transactions in 2016 — the most in the industry. JPMorgan Chase & Co. combines common sense and modern advancements to protect its clients from fraud. With the Chase Identity Theft Kit and its use of encrypted technology, it’s pretty good at keeping your information safe and sound.

    7. U.S. Bancorp. Founded in Minneapolis, U.S. Bancorp is the parent company of U.S. Bank, National Association. For every 100 million purchase transactions, it received 4.92 complaints, making them lucky No. 7 on our list. With a large purchase volume of $122.45 billion over 1.18 billion purchase transactions, U.S. Bancorp uses its broad employee and specialty base to protect its consumers from fraud on all sides. It requests verification and implements a rigorous account monitoring and fraud detection system to better protect its credit cardholders.

    8. PNC Bank. PNC Bank’s expertise seems to lend itself toward preventing credit card fraud. Even with a fairly large purchase volume of $31.05 billion, it is the eighth least likely to receive fraud complaints, with 5.21 complaints per 100 million transactions. This could be because of its numerous services preventing fraud, including Identity Theft Protection Insurance and Identity Theft Plus/Identity Protect Plus.

    9. First National Bank of Omaha. A subsidiary of First National of Nebraska, the First National Bank of Omaha was founded in 1857 and is still family run. It’s now recognized as the largest privately held bank in the US, with $17 billion in managed assets and a purchase volume of $15.59 billion charged to credit cards. It received 5.51 complaints per 100 million purchase transactions. With fraud monitoring and a zero-liability policy, the bank is still known for its innovative spirit and is the ninth least likely on our list to receive consumer complaints about credit fraud.

    10. Bank of America. Decorated with multiple awards and titles — including the World’s Best Bank in Financing and Diversity in 2016 and the Greenest Underwriter in 2015 — Bank of America excels not only because of the products it provides but also because of its focus on customer experience. They just make our list as the 10th least likely provider to receive a credit card fraud complaint in 2016, with 5.58 complaints per 100 million transactions. Partnered with both Visa and Mastercard, Bank of America credit cards are popular: Credit cardholders charged $311.29 billion on BofA credit cards in 2017. Despite its massive purchase volume, the bank is still safe to use and is even named best in class on the latest Javelin Safety Scorecard for the seventh consecutive year.

    States most likely to file a fraud complaint

    To gauge CFPB complaints nationwide, finder.com analyzed the number of complaints issued by state since the CFPB began collecting complaints in December 2011. Credit card consumers of Washington, DC, and Delaware are treated significantly less fairly: For every 100,000 people who live there, more than six file a credit card fraud complaint. Florida comes in a distant third at 4.6 complaints per 100,000 people. In general, those in the Mountain States and Deep South report the least amount of fraud.

    Rank States Complaints per 100,000 people
    1 Washington, DC 6.31
    2 Delaware 6.09
    3 Florida 4.66
    4 Nevada 4.22
    5 Maryland 3.99
    6 New York 3.55
    7 New Jersey 3.33
    8 California 3.19
    9 Rhode Island 3.22
    10 Massachusetts 3.11
    11 Georgia 3.08
    12 Virginia 3.00
    13 Hawaii 2.94
    14 Connecticut 2.88
    15 Colorado 2.83
    16 Vermont 2.72
    17 Arizona 2.74
    18 Maine 2.48
    19 Washington 2.41
    20 Oregon 2.35
    21 Ohio 2.31
    22 Pennsylvania 2.23
    23 Illinois 2.22
    24 Tennessee 2.17
    25 North Carolina 2.15
    26 South Carolina 2.12
    27 Nebraska 2.10
    28 Minnesota 2.08
    29 Texas 1.96
    30 New Hampshire 1.87
    31 Alaska 1.75
    32 New Mexico 1.73
    33 Michigan 1.69
    34 Wisconsin 1.68
    35 North Dakota 1.72
    36 Missouri 1.58
    37 Louisiana 1.56
    38 Alabama 1.56
    39 Kansas 1.51
    40 South Dakota 1.50
    41 Utah 1.44
    42 Idaho 1.37
    43 Oklahoma 1.22
    44 Iowa 1.21
    45 Missouri 1.20
    46 Indiana 1.18
    47 Arkansas 1.14
    48 Kentucky 1.13
    49 West Virginia 1.09
    50 Wyoming 1.02
    51 Montana 0.67

    To report or not to report?

    Identity theft is a serious crime. But if calling the police sounds like a lost cause, the police might agree. The Federal Trade Commission (FTC) previously recommended that customers file a police report to establish one’s innocence and record identity theft and related fraud. But police aren’t set up to manage such reports, act on them or properly assist victims. That’s why the FTC set up IdentityTheft.gov, which is specifically designed to help people restore their identities. Filing a complaint with the FTC meets the legal objective of the victim, provides them with useful services and centralizes the complaints in the Consumer Sentinel Network database, which is accessible only to law enforcement that can actually trace and crack scam rings. Unless you think you know who the perpetrator is — in which case calling the police is appropriate — submitting a complaint with the FTC is a way to protect yourself and help catch scammers.

    Taking it up with the CFPB

    But what happens when your bank is the one that is uncooperative in upholding your rights? By and large, you typically are not responsible for the unauthorized transactions.

    The FTC will actually direct you to the CFPB, because it’s the US government agency that makes sure banks and other financial companies treat you fairly. You can file a complaint with the CFPB, which will review it and send it over to the bank in question. The bank then has 15 days to answer before an “untimely response” goes on its record. The complaint is published anonymously or publicly in the CFPB database with the victim’s permission. The CFPB will notify you if your bank responds, in which case you have 60 days to provide feedback and your own response. The CFPB collects these complaints to write better laws to more fully protect consumers. They also work with the FTC to ensure that perpetrators are caught. If a smaller bank that holds less than $10 billion in assets is misbehaving, the FDIC may step in instead.

    Still take your vitamins

    Aside from choosing a credit card company that will handle fraud simply and promptly, you have a few ways to prevent it in the first place. Just because you may still get attacked, doesn’t mean you can’t be careful.

    • If you receive a call requesting personal information, ask for the name of the company or organization, the nature of the issue or offer, if there is a reference ID for the call and the name of the agent. Do not provide information. Instead, hang up and look up a number that you can call to verify the company and reason for the call.
    • Check your balance regularly. Fraudsters will often try out small amounts before going in for the kill. Which means that catching that $1 charge could save you a thousand-dollar headache later.
    • Don’t click popups, especially when checking out. A new scam asks you to verify your information or apply for a special offer during check out. If this happens, make sure you’re still on a secured URL with the “s” in “https.” The popup could be an attempt to take your personal information and steal your credit card information.
    • Reduce the number of credit cards you use to make it easier for you to track spending and notice fraud. Consider consolidating your credit card debt with a personal loan to both reduce interest rates and ensure you don’t accidentally use them.
    • For more advice, check out our 12 tips to avoiding credit card fraud we learned from analyzing CFPB complaints.

    Regardless of the credit card provider you choose, the more you buy with your credit card, the higher the chances that you will be the victim of credit card fraud. This correlation is particularly true if you shop online. However, the upside for digital shoppers: You’re more likely to notice it than those who don’t shop online frequently. As futile as that sounds, it is assuring to know that companies do have certain measures they can take to mitigate the damage inflicted.

    Methodology

    Projection cents per 100 dollars by the end of 2017

    • We plotted data from 2000 to 2015 on cents of fraud per 100 dollars.
    • We found the triple polynomial trend line to have the closest correlation R2 = 0.959.
    • Our formula was: y = -0.001259393771x3 + 7.616987151131x2 – 15,355.437939498000x + 10,318,083.236327600000.
    • We used this formula to predict cents of fraud per 100 for 2016 and 2017, where x = year, resulting in 13.48 cents per 100 dollars by the end of 2017.
    • We calculated the percent change by year by dividing the current year’s fraud rate by the previous year’s and subtracting one.

    10 ten credit card companies least likely to receive a complaint

    • We analyzed credit card companies that service consumers (not just businesses) with the largest US purchase transactions in 2016 according to the Nilson Report and also hold more than $10 billion in assets (as companies with fewer assets are regulated by the FDIC, rather than the CFPB).
    • We looked up the number of CFPB complaints each of these companies received categorized under “credit card” for product and “identity theft/fraud/embezzlement” for issues in 2016.
    • We divided the number of complaints by the number of purchase transactions. This proportion was multiplied by 100 million to get the number of complaints per 100 million transactions.
    • The top 10 credit card companies least likely to receive a complaint in 2016 were the 10 banks with the lowest number of complaints per 100 million transactions.

    States most likely to file a fraud complaint

    • We analyzed all CFPB complaints per company from December 2011 to April 2017. We did not consider complaints since April 2017, because the CFPB has recatagorized complaints since then, making it difficult to keep our analysis consistent.
    • We divided the number of complaints per state by the 2016 population of the state according to the US Census. We multiplied the proportion by 100,000 people to find complaints per 100,000 people.

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