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Online credit card fraud 2007
23/04/08
Credit card
fraud protection specialist, The 3rd Man, says that ‘card not
present’ crime in the UK is far higher than official statistics
suggest and is getting worse. Over £500 million of fraud was
attempted during 2007.
This alarming figure shows that the appetite among fraudsters around
the world to use the Internet for crime among UK retailers has far
from diminished, and comes at a time when retailers need every penny
of revenue they can get to cope with the effects of the global
credit crunch.
“Card not present fraud is a major problem which is not going away
and clearly is getting worse as criminals increase their efforts to
steal from retailers,” explains Paul Simms, CEO of the 3rd Man
Group. “We aren’t just talking about petty thieves and opportunists
here. This money also funds illegal drugs, organised crime and
terrorism.”
Retailers have become a soft target for fraudsters, although the
introduction of Chip and PIN dealt a massive blow to criminals.
Changing their focus to ‘card not present’ fraud, where the buyer
does not have to be physically present at the point of transaction
(such as Internet and Mail Order shopping), fraudsters have evolved
their techniques to con retailers out of millions of pounds.
However, many responsible retailers are now fighting back by using
behavioural data screening techniques and by sharing their data
through initiatives such as SuperSearch which scans millions of
‘live’ transactions for retailers each month.
“Behavioural analysis detects around 80% of all attempted frauds,
but retailers can be stung by exactly the same fraud committed with
another retailer. By sharing their data they are protecting each
other and in doing so will already save over £100 million in 2008,”
says Simms. “But more can be done. We have a real opportunity to get
on top of this problem through managed collaboration, involving
retailers, consumers and the banks.”
Shared databases contain clearly fraudulent and highly suspicious
data, including listings of bad or questionable details such as
email addresses, delivery addresses, phone numbers, IP addresses and
card numbers.
Shared databases are not restricted to retailers as banks can also
integrate their systems with services such as SuperSearch. “When
fraud is detected a data feed is sent to the respective bank
informing them that their cardholder has had details compromised,”
explains Simms. “They can then act to re-issue the account number
and possibly block the card. In the same way the banking community
succeeded with Chip and PIN, this is another major way to protect
retailers from card not present fraud.”
Nick Gibson, editor
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