Payment fraud is a moving target

The EC has released its review into the 2004-2007 EU action plan, for non-cash payment fraud. The report admits that “payment fraud is a moving target and, inevitably, new threats appear, such as identity theft/fraud and, more generally, cyber crime.”

1 billion Euro Loss
Citing 2006 figures, the EC says there are 10 million fraudulent transactions in the Single Europe Payments Area, affecting 500 000 merchants, representing a loss of approximately 1billion euros. The report also echoes previous reports of Chip and Pin resulting in fewer in-store fraudulent transactions, with a corresponding rise in on-line card payment fraud.

Travel and Online Gaming Fraud
The report highlights the airline and travel agency industry and the gambling and online gaming sector as weak areas but also points out that  fraudsters are taking advantage of known vulnerabilities; for example targeting sites which do not collect card security codes.

Identity Document Fraud
Identity data and supporting documents play an increasingly important role in transactions; and the report states that because if this, data and documents, rather than people themselves are increasingly becoming the subject of attack. 192.com Business Services has seen an increase in the number of customers choosing Document-ID; a service that verifies identity documents on an international scale, as payment processors and retailers try to counter-act this trend. Only last week the Information Commissioner released a statement saying it had been notified of more than 100 data breach occurrences in the past six months. 

Importance of 'knowing your customer'
The report concludes that whilst it is important to ensure the security of payment systems, there is also work to be done to improve customer confidence and trust. The report also notes the new ‘know your customer’ obligations, which should provide a basis for both security and customer trust.

The whole report is available here.

29th April 2008