The incidence of credit card fraud is rising dramatically in Canada.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 55% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
A new report from Equifax Canada (EFX) says that credit card fraud throughout the country rose 70% year-over-year in the second quarter. The report states that the rate of credit card fraud jumped to 0.75% in Q2 from 0.44% a year earlier.
That means that out of every 10,000 credit cards issued in Canada, 75 were fraudulent compared with 44 last year, a 70% increase. The rise in credit card fraud is bad news for leading card issuers Mastercard (MA), Visa (V), and American Express (AXP), which dominate the Canadian marketplace.
Economic Downturn
Analysts say the rise in credit card fraud is not surprising, coming as it does with the Canadian economy in a slump and many economists forecasting a recession within the next year. Equifax Canada, which is a consumer credit reporting agency, says the rise in overall credit card fraud comes despite application fraud rates in Canada declining to a three-year low.
Application fraud is when someone lies or uses stolen information on an application for a credit card or other loan. Analysts say that major credit card issuers such as Mastercard, Visa, and American Express have gotten better at detecting application fraud and have beefed up their surveillance mechanisms in recent years.
Is MA Stock a Buy?
The stock of Mastercard has a consensus Strong Buy rating among 20 Wall Street analysts. That rating is based on 17 Buy and three Hold recommendations issued in the last three months. The average MA price target of $628 implies 10% upside from current levels.
