Credit card fraud is still very much a problem in the United States, which has experienced increased opportunity in online shopping and digital payments. This paper aims at examining how the consumer data such as the demographic data, the purchasing behavior and the security measures they adopt can help improve fraud prevention measures. This study is based on survey data of 200 participants from US credit card users, supported by data on recent frauds. Other variables considered were age, income, number of online transactions, password creation and protection and two-factor authentication.

Quantitative data approaches such as descriptive and inferential statistics were used in this study whereby chi-square tests, t-tests and logistic regression were used in an attempt to determine the significant relationships that exist between consumer characteristics and fraud risk. A cross-tabulation of the variables provided a measure of association and showed that increased age, income level and the number of transactions made online were associated with increased vulnerability to fraud. Users with a low age and high income were classified as high-risk users because they make frequent transactions online and have larger amounts of digital data. Participants who provided proactive activities in security practice like changing passwords often and the use of two-factor authentication had a low risk of fraud, the need for consumers to be aware of risks.

Results indicate that it is possible to improve the security of credit cards in the US financial sector by implementing individual anti-fraud measures considering the behavioral and demographic characteristics of consumers. Consumer behavioral data enables the institutions to adopt dynamic approaches that involve real-time transaction notification and behavior-driven analytics to enhance the accuracy of fraud identification and reduce on false alarms. This paper also shows that behavior-inspired, evidence-based approaches hold the key to the improvement of credit card security and consumer confidence. Subsequent studies shall analyze how compliance influences the advanced data-based security solutions and such research can use the aged fraud typologies and trends to understand their possible changes over time.

Credit card fraud, consumer behavior, data-driven security

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