Chip and Pin success 'forcing fraudsters to pursue other avenues'
July 27, 2007
The success of Chip and Pin technology in reducing credit card fraud means criminals are "looking for other areas to exploit", it has been suggested.
Mark Bowerman, spokesperson for UK payments association Apacs, believes that the adoption of Chip and Pin has made a "contribution" to the rise in online fraud.
Figures released by Apacs in March show that while losses from credit card fraud fell from £439.4 million in 2005 to £428.0 million in 2006, there was an increase in online banking fraud from £23.2 million to £33.5 million in the same period.
"Certainly as you close down one avenue for the fraudsters, we know that they’re not going to pack up shop and get legitimate jobs, they’re going to look for other areas to exploit, and certainly the fact that this type of fraud has gone up would indicate that they’re doing that," commented Mr Bowerman.
However, he did point out that there may be other contributory factors to the rise in online fraud.
These include rises in the number of transactions made on the internet and the number of businesses offering an online service - both of which have afforded fraudsters a greater opportunity to exploit consumers.
Written by Peter Kenny · Filed Under News Credit Cards
This, of course, is no surprise. I, and many others, hav predicted this shift in fraudulent card use since Chip and PIN was announced several years ago. If Mr. Bowerman thought otherwise he had his head in the sand.
In fact, I would say that Chip and PIN did exactly what it was designed to do - move credit card fraud to the e-Commerce sector where the industry profits from fraud in the form of chargeback fees, double transaction fees, higher exchange rates, and other hidden costs.
Why suffer from Card Present fraud when you can pass it on to the merchant (and ultimately the customer) in the Card Not Present world.
Tom Mahoney,