Mixed fraud figures
March 14, 2007
While the total value of fraud is falling, some types of fraud are on the increase, according to the figures for 2006 released today.
The Association of Payment Clearing Services (Apacs) data shows that card-not-present fraud increased by 16 per cent even though overall credit and debit card fraud was down three per cent.
According to Apacs, the introduction of chip and pin technology is responsible for the reduction of 47 per cent in fraud committed in face to face transactions at retailers, though fraudsters are exploiting internet, phone and mail payments as well as cloning cards to use abroad.
Fraud committed on foreign soil, where retailers often have not upgraded to chip and pin, rose 43 per cent.
Sandra Quinn, director of communications at Apacs, said: "Fighting fraud is never going to succeed with a single-layered approach. It requires different sectors – including public and private – to work together on developing and implementing strategies, sharing best practice and, most importantly, sharing data."
There are already various mechanisms in place to tackle card-not-present fraud such as address verification and card security system.
Mastercard SecureCode and Verified by Visa are also two easy-to-register password-based schemes protecting online shoppers.
Lloyds TSB has announced it will expand its ‘First Alert’ technology to debit card holders.
The bank’s customers will receive a phone call asking them to verify the validity of transactions that are suspected to be fraudulent.
Written by Peter Kenny · Filed Under News Credit Cards
According to APACS fraud has fallen for face to face transactions by 47%. That’s funny as the Scottish Grocers Federation reported a massive increase in card fraud of 54% in 2006.
In the APACS press release fraud at ATMs fell slightly by 6% to £61.9 Million. Not quite the 80% drop you’d have expected to see, why?
Counterfeit card fraud stands at £99.6 Million, up 3% on the previous year, yet counterfeit cards cant be used in UK Chip & PIN compliant shops, or can they?
Could the recent spate of doctored PIN entry devices in UK garages be the answer to the counterfeiting problem? PIN pads are reportedly fitted with software which records card details and PINs. These cards are then used, mostly overseas at ATMs to withdraw hard cash. No need to use a cloned card in a shop.
As long as magstrips remain on cards, the Achilles heal of the system will be PINs. PINs open the door with stolen or cloned cards and crooks very rarely get caught.
Watchdog BBC, 6 Feb 2007, reported that banks are refusing to refund customers whose Chip and PIN cards have been used fraudulently.
The follow-up programme one week later advised cardholders to ask their card issuer for Chip & Signature cards.
It’s easy to undersatnd why an awful lot of cardhodlers will be binning the PIN.