With all the credit fraud nowadays, has anyone experienced any downside to this ?

There is plenty of downside to credit card fraud across the board -to consumers, merchants and payment processors/banks. I have seen examples of all of these directly.

Consumers lose when there are issues of identity theft fraud that occur. This can result in them losing their ability to obtain legitimate home loans, car loans and consumer credit and result in an unbelievable amount of headaches and problems that can often take many years to resolve.

Merchants lose when credit card fraud is conducted against them and they incur chargeback losses on top of losing merchandise or services that they have provided in good faith.

Payment processors & financial institutions lose when they incur losses due to merchants that incur chargebacks and then fail to honor their obligations to pay for them or get hit with losses that they can't satisfy and the processor/acquiring bank is left responsible for 100% of the refund payments.

Despite the above, there are of course also ways that each three of these groups can also act to help mitigate or reduce the likelihood of those events happening.

Here's another fraud update from MSN

http://www.msnbc.msn.com/id/6297815/?GT1=5470