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The fraud potential of unregistered credit cards

Interesting to read a story on the South American newswires that, whilst 20 per cent of credit cards issued in the US never get activated, MasterCard reckons this percentile doubles in other markets, even hitting 50 per cent in South America.

Research conducted by MasterCard Advisors, the research arm of MasterCard, highlights the fact that card issuing organisations are wasting a small shedload of money by failing to encourage punters to activate their new cards.

At the same time, the research says, the card companies are spending as much as $150 (around 80 quid) on luring - sorry - signing up new customers to their credit card programs.

So what aren't punters activating their new cards? The main reason, the study found, was that cardholders were unaware of the benefits their cards had, mainly because the plastic had been `pushed' to the client, rather than `sold' on the basis of its benefits.

The interesting part about this study is that it completely overlooks the fact that, with between two and four in ten credit cards not being activated, the fraud potential for such cards is immense.

If the cards are activated by fraudsters, rather than the legit cardholders, the fraudster then has the entire credit limit of the punter to spend.

I wonder if MasterCard have realised this minor point?