Surprise, surprise - card fraud continues to grow
Tuesday March 31st 2009
It is always interesting to check out the latest annual fraud figures from APACS as they continue to show how ineffective and poor value for money chip and PIN has been.
By Glynn Davis
While it has helped reduce fraudulent activity in-store this has been at the cost of rocketing criminal activity within the area of card not present (CNP), which involves all transactions undertaken over the internet and phone.
Criminals continue to find this a much more lucrative domain in which to rip-off consumers and retailers compared with in-store where chip and PIN has made their job much more difficult. CNP fraud increased 13 per cent over the past year, to now account for 54 per cent of all card fraud losses.
APACS suggests this highlights the need for greater take-up of online fraud prevention systems such as MasterCard SecureCode and Verified by Visa. This may well be true but there appears to be little effort being put into promoting this by the card schemes or the banks.
The most worrying aspect of the APACS fraud figures is the significant growth in card ID theft, whereby a genuine card and genuine PIN are stolen. Fraud committed through such means has increased 39 per cent over the past 12 months.
Because this enables theft to take place in-store it suggests that the overall effectiveness of chip and PIN is even more limited than the early critics of the technology had initially predicted. The criminals continue to remain numerous steps ahead of the banks and we are all paying the price for this.
Editor's Note: Just wait until hackers get their fraudy little fingers on a web based PIN Debit offering. That'll be fraudy finger licking good.
glynnd@theretailbulletin.com
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