MP Shows Support for Fraud Data Sharing

Speaking at the seventh Prove-ID conference for Fraud Prevention Professionals, Vernon Coaker MP outlined his support for the fraud prevention community.

Mr Coaker stressed the importance of the National Fraud Strategic Authority (NFSA) which will create a nationwide policy of fraud. The NFSA will oversee the National Fraud Reporting Centre and National Fraud Intelligence Bureau will aims to improve the intelligence available to law enforcement, enabling more targeted operations.

Also mentioned in the speech is support for Fraud Data Sharing, which Mr Coaker said is: "crucial to tackling fraud".

The speech also mentions two new initiatives; the Policing Green Paper and a new campaign from APACS, IMRG and the BRC. Mr Coaker urged retailers to get behind the campaign which aims to raise awareness of using cards online safely, whilst stressing that shopping online is convenient and safe.

The full speech transcript is available here.

Prove ID 7 Great Success

Yesterday, saw the seventh Prove-ID Fraud Forum, held at the Oval Cricket Ground.

The forum brings together fraud professionals for a day of intelligence sharing, including a series of fascinating presentations, a merchant panel discussion and networking opportunities.

Highlights of the day included a presentation from DC Shaun McLeary of the National Terrorist Finance Intelligence Unit who showed how CNP fraud and money laundering can fund terrorist activity.

The forum also heard how retailers can work together with the police to deter and prevent fraud, and heard about the successes of past joint projects.

Thankfully, the weather was in our favour allowing delegates to catch some of the action from the Surrey vs. Nottinghamshire match during breaks.

RBS gave their insight into fraud and age verification challenges, adding an acquirer’s perspective to the day’s discussion.

The group also heard from special guest speaker Vernon Coaker, Under Secretary of State for Crime Reduction. Mr Coaker re-affirmed his support for the fraud community, recognizing the problems faced by e-commerce operators; and encouraged those in attendance to study the latest Home Office consultation; the Policing Green Paper.

The Merchant Panel session always proves popular, and this year’s panel consisted of Otto, Panasonic and PKR.com who provided their insight as well as answering questions from the audience.

192 would like to thank all of our guest speakers and panelists, and all those who attended for contributing towards making Prove-ID a success.

Money Laundering Ring Smashed

A UK team lead of lawyers and insolvency practitioners has reclaimed millions of pounds of money laundered as part of a carousel fraud scheme.

The fraud involved mobile phones being shipped in order to fraudulently claim up to an estimated £600 billion, laundered through a Caribbean bank.

Carousel Fraud, occurs when a fraudster takes advantage of VAT rules in the EU.
Because cross border trade is not subject to VAT, exporters can reclaim the VAT charges from the government, however in carousel fraud trades are usually virtual or the last company in the chain selling the goods disappears, meaning the exchequer is left out of pocket. In this case, the same mobile phones were sent back and forth across borders, with tax fraudulently reclaimed each time.

As well as defrauding the tax system this fraud case, also allowed anonymous money laundering; and could have been used to launder the proceeds of crime.

It is believed that this is one of the biggest ‘carousel fraud’ money laundering to be broken and a total of £51 million has been recovered from First Curacao International Bank, which was itself forced to close in 2006 as a result of an Anglo-Dutch criminal investigation.

You can find more information on money laundering solutions here.

Business Fraud up 22% to $8.2million

According to the latest Kroll Global Fraud Report the average company loss to fraud has increased by 22%.

The report shows that companies lost an average of $8.2million to fraud over the past 3 years; an increase on 2007 figures which put losses at $7.6million.

Identity theft id the fastest growing type of fraud, accounting for 27% of losses, with regulatory and compliance breaches also increasing; up 5% to account for 22% of all losses.

The increase in business fraud will no doubt be blamed on the current economic climate, and this is supported by the construction and natural resources industries suffering the most incidents of fraud.

Perhaps also reflecting the recent woes in the holiday industry, the travel, leisure and transport sector reported the highest increase in regulatory and compliance breaches.

Of the ten categories that have been tracked in the survey, only money laundering and procurement fraud saw a decline in reported fraud; although the figures put the decline at 1% each.

Blake Coppotelli, Senior Managing Director at Kroll’s Business Intelligence & Investigations division said: “The findings show that fraud is not only widespread, but also growing and we expect to see this increase further as conditions become tougher for business and the full impact of the credit crunch unfolds.”

The full report can be found here.

UIGEA Update

Move announced to protect financial services and clarify Lawful Internet Gambling Activities

Congressman Barney Frank, has introduced the Payments System Protection Act of 2008, in a move to create a formal process defining what types of online gambling are unlawful. It is hoped that the move will create more clarity, especially for the payments sector; currently under pressure to help police UIGEA.

The Payments System Protection Act, announced on September 11, would require that federal regulators recruit a special Administrative Law Judge to investigate the impact on the economy of complying with UIGEA, as well as defining what constitutes unlawful gambling.

The move follows the defeat of the first Payments System Protection Act which attempted to block the implementation of UIGEA.

Chairman Frank commented earlier in the year on this situation facing the US payments system, saying: "Hijacking the financial payment system at a time when it is under major stress and giving them the job of carrying out an unclear mandate doesn't make sense," he said.

Barney Frank supports the Internet Gambling Regulation and Enforcement Act of 2007, which seeks to allow licensed gambling, but includes strict governance to guard against under age gambling, money laundering, identity theft and problem gambling.