Protecting Your Plastic: Safeguarding Against Fraud

In an era dominated by digital payments, safeguarding your plastic—credit cards, debit cards, prepaid cards, and digital wallets—has never been more crucial. Fraud losses skyrocketed to $12.5 billion in 2024, marking a 25% increase from the previous year.

This surge is part of a broader identity and payments fraud crisis that threatens financial security worldwide. By understanding the risks, you can take proactive steps to protect your assets.

From AI-driven scams to synthetic identities, the threats are evolving rapidly. Knowledge is your first line of defense in this digital battlefield.

The Expanding Threat Landscape

Card fraud is no longer just about stolen physical cards. It is deeply embedded in a wave of digital fraud that impacts everyone. Identity fraud losses reached an alarming $27.2 billion in 2024, up 19% year over year.

This crisis extends beyond individual losses, affecting businesses and economies globally. Cybercrime costs are projected to hit $10.5 trillion annually by 2025.

• Credit card fraud reports increased by 51% in the first half of 2025.
• New account fraud dominates, accounting for about 90% of all credit card fraud.
• Synthetic identities drive over 80% of new account fraud losses.

These trends highlight the urgent need for vigilance. Plastic is increasingly attacked during digital transactions and account openings.

Understanding Card-Specific Fraud Metrics

Focusing on card fraud reveals startling growth and sophistication. Fraudulent activity in financial services rose 21% from 2024 to 2025.

Many banks now flag 1 in every 20 digital verification attempts as potentially fraudulent. This underscores the scale of the problem.

These numbers illustrate that fraud is not isolated but part of a coordinated attack on digital finance.

Major Types of Card-Related Fraud

Understanding the various fraud types helps in recognizing and preventing them. Traditional methods persist, but new schemes are emerging.

Card-not-present fraud, such as online transactions, remains a significant threat. Counterfeit cards via skimming devices capture magstripe data and PINs at ATMs.

• Lost or stolen card use: Physical theft leading to unauthorized purchases.
• Account takeover: Criminals gain access via stolen credentials or social engineering.
• Authorized push payment fraud: Victims tricked into sending money through scams.
• Bust-out fraud: Fraudsters max out credit limits after nurturing accounts.

Synthetic identity fraud is a key trend, combining real and fabricated data to create fake customers. Synthetic documents fraud surged 311% in North America in Q1 2025.

This type often operates undetected for months before bust-out events. It highlights the need for advanced verification methods.

The Rise of AI and Synthetic Identity Fraud

Artificial intelligence is revolutionizing fraud, making it more sophisticated and harder to detect. AI-generated media is 300% more likely to be used in fraud attempts.

Deepfake and AI voice scams are on the rise, with 1 in 10 adults encountering them. 77% of those victims reported financial losses, showing the effectiveness of these tactics.

• AI-powered credit application fraud: Tools refine documents to evade checks.
• Multi-step fraud attacks: Increased by 180% year over year, indicating complex schemes.
• Digital forgeries: Comprise 35% of document fraud, often AI-altered.

Only 13% of companies have anti-deepfake protocols, leaving many vulnerable. This technology helps criminals fabricate IDs and bypass remote verification.

It directly threatens plastic by enabling synthetic account openings. Staying ahead requires awareness and updated security measures.

Who is Most at Risk?

Fraud targets everyone, but certain groups are more vulnerable. Younger adults, such as those aged 20-29, report losing money in 44% of fraud cases.

This contrasts with older adults, who lose more per incident. Seniors face much larger financial losses on average, accounting for 41.46% of total losses.

• Millennials and Gen Z: Make up 42% and 21% of identity theft reports, respectively.
• Adults 60+: Suffer higher per-case losses, often in the $20,001–$120,000 range.
• Victims of romance or investment scams: Increasingly targeted by AI-enhanced schemes.

This diversity in victim profiles means that no one is immune. Frequency is higher for younger adults, but financial devastation hits older victims hardest.

Understanding these risks can help tailor personal defense strategies. Education and caution are vital across all age groups.

Practical Steps to Protect Your Plastic

Taking action can significantly reduce your risk of fraud. Start by monitoring your accounts regularly for suspicious activity.

Use strong, unique passwords and enable two-factor authentication wherever possible. Regularly update your security software to guard against malware.

• Review statements: Check for unauthorized transactions monthly.
• Freeze your credit: Prevent new accounts from being opened in your name.
• Use virtual cards: For online purchases to limit exposure.
• Avoid public Wi-Fi: For financial transactions to reduce interception risks.
• Educate yourself: Stay informed about common scams and fraud trends.

Be cautious with personal information online. Shred documents containing sensitive data before disposal.

Report any suspected fraud immediately to your bank or card issuer. Early detection can minimize losses and prevent further damage.

Institutional Defenses and What to Expect

Banks and merchants are also enhancing their tools to combat fraud. Consumers should expect robust protection from their financial institutions.

Advanced technologies like biometric verification and AI-driven fraud detection are becoming standard. These tools help flag synthetic identities and unauthorized transactions.

• Real-time monitoring: Systems that detect unusual patterns instantly.
• Tokenization: Replaces card details with secure tokens in digital wallets.
• Enhanced customer verification: Multi-factor authentication during onboarding.
• Collaborative networks: Sharing fraud data across institutions to identify threats.

However, only 13% of companies have protocols for deepfake threats, indicating gaps. Consumers must advocate for stronger protections and choose providers with proven security measures.

By working together, individuals and institutions can create a safer financial environment. Trust but verify when engaging with new services or offers.

Ultimately, protecting your plastic requires a combination of personal vigilance and institutional support. Embrace these strategies to navigate the digital world with confidence and security.