Twice as many credit card fraud cases involve phone or online transactions than retail sales, according to new data from FICO. However, researchers found that sophisticated counterfeit rings have raised the stakes for merchants over the most recent twenty month survey period.

Researchers reported an increase in "skimming," a technique where criminals tamper with ATMs and payment devices to capture both card details and personal identification numbers. Thieves can use magnetic stripe blanks or other stolen cards as "clones," passing details of a stolen account to a payment device without the victim's knowledge. ATMs, grocery stores, and automated fuel pumps topped the list of places where criminals use stolen or cloned debit cards.

Thieves test stolen credit cards online before shopping in public

According to company spokesman Doug Clare, fraud rings usually test stolen cards with smaller online transactions. In a statement to reporters, Clare described online tests as a "relatively safe" way for thieves to learn whether victims notice extra purchases on their monthly statements.

The theory rings true with researchers at J.D. Power and Associates, where the results of an annual customer satisfaction survey show that nearly a quarter of reported credit card problems involve fraudulent transactions. That survey gave Discover top honors for resolving fraud investigations quickly.

American debit card usage grows

FICO's numbers show that American consumers rely on debit cards more than ever, driving a 15 percent increase in authorization volume compared to the previous study period. Federal rules leave consumers responsible for only $50 of fraudulent debit card transactions if reported within two days, though Visa and MasterCard now require member banks to follow tougher "zero liability" rules. Debit card fraud can, however, leave consumers on the hook for bounced check charges or failed bill payment fees while bank investigators to restore stolen funds.

The FICO Falcon Fraud Manager Consortium monitored millions of credit card transactions between January 2010 and September 2011. Researchers use the data to develop complex algorithms that protect client issuers and their cardholders from identity theft and fraud. Analysts found fraudulent transactions in only 1 percent of their sample.