Credit card fraud is on the rise, with Experian (OTC:EXPGF) documenting a 22% increase in detected fraudulent applications from January through September of this year compared to the same period last year. Eduardo Castro from Experian highlighted the significant financial and emotional impact of identity theft, especially "third party" incidents, and emphasized the importance of consumer alertness ahead of an expected spike in fraud this Christmas season.
To combat this growing issue, Experian has been proactive in its approach, intercepting over £1.9 billion in potential fraud annually. Its continuous monitoring efforts result in one detected fraud per minute. In response to the heightened risk, Experian has initiated an awareness campaign featuring Santa Claus as an identity theft victim to stress the importance of vigilance among consumers.
As part of its strategy to prevent fraudulent activities, Experian collaborates with the National Hunter consortium. This partnership facilitates data sharing across banks and financial institutions, significantly enhancing the industry's ability to detect and combat fraud effectively. The company anticipates increased fraudulent activity over the upcoming holiday season and advises individuals to exercise caution when dealing with unexpected messages and dubious online propositions.
InvestingPro Insights
In light of the growing threat of credit card fraud, Experian's proactive measures to counteract this issue have reflected positively on its financial performance. According to InvestingPro's real-time data, Experian boasts a substantial Market Cap of 33369.47M USD, indicating strong investor confidence in the company. The P/E Ratio of 32.49 further suggests that investors are willing to pay a high price for the company's earnings, which is a testament to Experian's robust financial health.
InvestingPro Tips highlight a couple of key strengths that have contributed to Experian's solid performance. Firstly, the company exhibits high earnings quality, with its free cash flow exceeding net income. This indicates that Experian's earnings are backed by cash, thereby reducing the risk of financial manipulation. Secondly, Experian yields a high return on invested capital, which suggests that the company is effectively using its capital to generate profits.
Moreover, the company has maintained its dividend payments for 44 consecutive years, demonstrating a commitment to returning value to its shareholders. This, coupled with the fact that the company has been profitable over the last twelve months, places Experian in a favorable light among investors.
For those seeking to delve deeper into Experian's financials and gain more insights, an InvestingPro subscription, currently on a special Black Friday sale with a discount of up to 55%, would be a wise investment. It provides access to a wealth of additional tips - 13 for Experian alone - and data metrics to guide your investment decisions.
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