ENP Newswire -
Release date- 25022014 - Card fraud within the Single Euro Payments Area (SEPA) increased in 2012 for the first time since 2008, driven mainly by higher internet fraud.
The third report on card fraud, published today by the
The report, compiled by the
CNP fraud has been on an upward trend over the past few years, and increased by 21% from 2011 to 2012. However, this must be viewed in the context of fast-growing CNP usage: data on regular CNP transactions, which were only partially available, suggest that CNP payments rose by around 15% to 20% a year between 2008 and 2012, compared with 4% a year for all transactions, i.e. including ATM and POS transactions. Significantly, increases in this kind of fraud were also observed in countries that had previously made major efforts to increase the security of the card payments via internet, albeit mostly relying on additional passwords rather than more advanced techniques such as random codes generated by a token or chip card reader. Such advanced techniques, together with awareness of the importance of security among cardholders and merchants, become necessary as fraudsters become more sophisticated. This is all the more important given that further growth in CNP usage can be expected.
Against this background, the
Higher ATM and POS fraud was caused mainly by higher counterfeit fraud committed (i.e. the moment a cloned card is used) outside SEPA. Counterfeit fraud is continuing to shift to countries outside SEPA owing to higher security standards at ATMs and POS terminals inside the area. In 2012 94% of ATM and 65% of POS counterfeit losses were incurred outside SEPA, rising sharply from 53% and 58% respectively in 2008. This situation should improve as more countries migrate to the EMV security standard, in which cards equipped with chips allow for safer infrastructure systems and authentication processes. However, where magnetic stripe usage cannot be completely avoided, card schemes and issuers should adopt further measures to prevent fraud, such as carrying out enhanced monitoring of transactions, setting limits and imposing blocks on transactions from specific countries, which could be temporarily lifted according to customers' needs.
For credit and delayed debit cards, which are predominantly used for internet and cross-border transactions,
This third report shows that, on average, cards issued in
The report is available on the ECB's website.
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