Credit card fraud attempts rise amid coronavirus pandemic

Yahoo Finance's Alexis Christoforous, Brian Sozzi, and Ethan Wolff-Mann discuss the rise in credit card fraud attempts as consumers are forced to use the online interface amid the coronavirus pandemic.

Video Transcript

BRIAN SOZZI: Credit card fraudsters are using the coronavirus pandemic as a time to pounce. Attempted debit and credit fraud transactions rose 35% in April from a year earlier. Yahoo Finance's Ethan Wolff-Mann joins us with the details. Ethan, this is bad. Should I just go back to using cash? This is-- it's not good?

ETHAN WOLFF-MANN: You can try using cash, Brian. But you will have a hard time trying to pay over the internet with it. This is the really interesting thing, I think, is you know, we've moved in the past few years from this, you know, the swipe model. We've added the chip. We've had at the tap, all of these extra things, trying to make it easier. Now we can't use any of it. And we're forced simply to use the online interfaces, which generally are pretty good.

But right now-- and actually, this is something that all the processors said was going to happen, that with, you know, the difficulties of doing frauds in person, that they would just go to the internet. And clearly, the pandemic situation of people being in confinement has led to an explosion of this. It's also been a really easy-- or a far easier environment to take advantage of people who are maybe more stressed, I think, is fair to say from the public health crisis and the economic crisis. And so this has been really a hotbed for a wide array-- array of various scam activity. And so it's really no surprise that credit card would be a big part of that.

ALEXIS CHRISTOFOUROS: So Ethan does this have anything to do with the rising number of phishing emails and phishing phone calls? I mean, I've been getting them. I mean, have they been on the rise? Is that sort of the method du jour for these bad actors out there?

ETHAN WOLFF-MANN: Yeah. And you know, phishing really relies on the manipulation of humans and their own behavior. You know, just think about somebody who's working from a home, maybe with a child there, trying to juggle many things at once. You're going to have a really hard problem-- you know, a harder time thinking really critically about everything. So a really good phishing attempt has a far greater likelihood of getting-- getting in there rather than, you know, in normal circumstances when you can maybe give a little bit more-- a little bit more focus. I mean, everybody is stressed, which I think makes-- makes the ease of vulnerable-- or makes the vulnerability much higher for people.

But when you have also people having to communicate more over email remotely and less in person, you have another sort of-- you have more communications coming in. And so it may be less scrutiny for each one. But this is a really effective way that I think a lot of scammers are using.

And also you-- I mean, you see this based with-- we saw reserve your place in line for coronavirus testing a few months ago, you know, scams like that. And so I think there's a lot of corona-connected scams and phishing attempts.

BRIAN SOZZI: You know, the one-- the problem here, among many, Ethan, is that if my account is hacked and I call for a new card, I'm not getting that card perhaps anytime soon.

ETHAN WOLFF-MANN: Yeah, this is-- you see some-- some credit card issuers being able to offer virtual cards and kind of making it OK. Because you really-- I mean, you don't necessarily need that physical card in your hand to do a transaction. You just need the numbers. You need it connected to your accounts. And so there have been some creative solutions out there but not for everyone, not for every bank, and not for every credit card issuer.

And so I think that-- that-- you know, if there is a delay and, you know, a replacement card coming in, that can really, really screw people up and I think is just another layer of inconvenience on this whole thing that-- that feeds this vulnerability loop.

BRIAN SOZZI: And Ethan, I'll just say this too. I'm confused why I haven't gotten my whole wheat loaf of bread from your Kitchenaid mixer behind you.

ETHAN WOLFF-MANN: I sent you a bunch of them. I don't know. I mean, the mail service is-- is-- is really taxed, I think we can all.

BRIAN SOZZI: No, I'm calling you out. That's fake news. All right, Ethan Wolff-Mann, always good to speak with you. Stay safe. We'll talk with you soon.