The European fraud landscape is in a state of constant flux, but some trends can pop out over time. For instance, new research has revealed that card fraud losses rose 6% across Europe in 2014, and £29 million in the UK alone.
Most of this increase was due to cross-border fraud, with domestic losses remaining flat. Also notable (and related): 70% of losses were due to card-not-present fraud.
According to FICO, formerly known as Fair Isaac, different countries have different defenses against fraud, and their adoption rate of powerful analytics and use of EMV technology (Europay, MasterCard and Visa’s technical standard for smart payments) matters in particular. EMV (otherwise known as chip-and-PIN) adoption for credit cards has pushed criminals from one country to the next and from one form of attack to another. To the latter point, many of them are eschewing physical card fraud and focusing on CNP transactions, such as those made over the phone or via e-commerce.
As the US adopts EMV this year (Oct. 1 is the deadline for retailers to make the switch), the fraud patterns around the world are likely to change, and banks need to improve their fraud management to prepare for this shift.
“Banks in the UK and most of Europe adopted EMV technology years ago, so it may appear that they have little to worry about from mag-stripe fraud,” said Martin Warwick, FICO’s fraud chief for Europe. “However, the trends suggest that any European plastic card can be targeted, as criminals try to ‘fill their boots’ before the US finally shuts the door on skimming fraud.”
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