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Card Payment Fraud


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  • 1. Card Payment FraudReport Details:Published:April 2012No. of Pages: 67Price: Single User License – US$3800•This VRL report contrasts moves being taken to defraud corporates and individuals using cards and the action being taken to counter the fraud•It details types of fraud practised in the market•It looks at some country based examples of how technology is being used to fight fraud•It examines what collective moves are being taken by industry leaders, stakeholders and associations to fight fraudSummaryThe latest available statistics in 2010 show that globally, card payment fraud recorded extremelyhigh rates of occurrence. Despite the many efforts to reduce and eliminate fraud through buildingan improved understanding of fraud threats, sharing data on prevention and mitigation benefits,and increasing public awareness with regards to fraudulent card payments, fraud continues toimpact the financial industry and global economy. Since consumers are becoming moredependent on card payments, industry leaders, stakeholders and various organisations comprisingthe card payment industry must develop and implement various strategies to combat fraud.Organisations are working to prevent and mitigate the risk of card payment fraud, as well asreducing its effects by employing the latest technologies and innovations in card payment systemsand software, including technologies in fraud detection.In this report, current statistics on card payment fraud are presented in key countries and regions,including Europe, Asia-Pacific, the US and the UK. These countries and regions have varyingrates of card payment fraud and are implementing various strategies and technologies to reduceand eliminate fraud. This report specifically discusses the strategies and practices implemented byleading banks, financial institutions and organisations in order to reduce the impact of cardpayment fraud. The thoughts and opinions of industry leaders have also been gathered andincluded in this report to provide an overview of the current situation with regards to card paymentfraud. Key points on how banks and financial institutions cope with high rates of card paymentfraud are also discussed here. Similarly, the effects of fraud on consumers and how they adapt toit are credited. The report provides an overview of the ways in which awareness is being increasedwith regards to card payment fraud across all members of the payments industry and cross-bordercollaborations which aim to share fraud prevention and mitigation measures.Scope
  • 2. •This report shows how and why the cards and payments industry must ensure that the correct checks and balances are in place to face new and inventive attempts to defraud•The content provides an overview of the ways in which fraud awareness is being raised across the payments industry•It includes advice on detecting fraud, mitigating risks and preventing losses•Global examples and statistics are providedReasons To Buy•View current statistics on card payment fraud from a variety of key countries and regions, including Europe, Asia-Pacific, the US and UK•Study the measures introduced by banks and financial institutions to combat fraud•Stay ahead of the curve with advice on detecting, mitigating and eliminating fraud•Consider the global challenges in relation to card payment fraudKey Highlights•Card payments have a number of weaknesses which makes them susceptible to fraud•As chip and pin cards become more secure, criminals will shift attention to more vulnerable products such as magnetic stripe cards•Detection procedures are always one step behind fraudsters•Some existing fraud detection tools are inefficient and obsoleteGet your copy of this report @ points covered in Table of Contents of this report includeTable of ContentsExecutive SummaryList of FiguresList of Tables1 The rising global challenges in relation to card payment fraud1.1 Upsurge of the card payment market1.1.1 Rise of global card users1.1.2 US: global leader in card-based transactions1.2 Dimensions of the global card payments crisis1.2.1 Global card payment fraud shows no signs of declining1.2.2 Global card fraud victims remain stable in number1.2.3 Card fraud demonstrates signs of weakness1.3 Challenges to improving card payments security1.3.1 Unresolved vulnerabilities of card-based payments1.3.2 Sophisticated and fast-evolving tactics of card fraudsters2 Development of card payment fraud2.1 Defining card payment fraud2.1.1 Payment fraud in relation to account authorisation2.1.2 First party vs third party payment fraud
  • 3. 2.1.3 Payment fraud in relation to illegal use of payment instruments2.1.4 Payment fraud as an act of criminal deception2.2 Prevailing types of card payment fraud2.2.1 Fraud by lost and stolen cards2.2.2 Application fraud2.2.3 Counterfeit card fraud2.2.4 Card-Not-Present (CNP) fraud2.3 Latest trends and anti-card fraud methods2.3.1 Fiercer card skimming techniques2.3.2 Malware attacks2.3.3 Triangulation2.3.4 Advanced phishing, vishing, SMSishing and Whaling3 Recent fraud trends and outbreaks in selected major card payments markets3.1 Card payment fraud in the US3.1.1 US credit and debit card fraud on the rise3.1.2 Real card fraud statistics in the US remain scarce3.1.3 US in danger of becoming a prime target of counterfeit card fraud3.2 Card payment fraud in the UK3.2.1 Card payment fraud down 17% in UK3.2.2 CNP fraud: UK’s largest card fraud loss in 20103.2.3 UK not complacent despite card fraud decline3.3 Card payment fraud in the Asia-Pacific region3.4 Recent predominant shifts in card payment fraud3.4.1 Card-present fraud to CNP fraud3.4.2 EMV country to non-EMV country3.4.3 EMV enabled chip credit cards to magnetic stripe debit cards4 Detecting card payment fraud4.1 Fraud prevention vs fraud detection4.2 The growing challenge on card fraud detection4.2.1 Exchange of ideas on card fraud detection is severely limited4.2.2 Detection procedures are always one-step behind the fraudsters4.2.3 Existing fraud detection tools are short-ranged and obsolete4.3 Detection and fraud risk management: a starting point4.3.1 Authentication4.3.2 Activation process4.3.3 Transaction behaviour monitoring4.3.4 Fraud control at the POS4.4 Overview of the world’s cutting edge fraud detection technologies4.4.1 Proactive risk management from ACI Worldwide4.4.2 Alaric’s fractals product5 Card payment fraud and the consumers5.1 Consumers growing fear of card payment fraud
  • 4. 5.2 Consumers increasing vulnerability to fraud5.3 Consumers battling card payment fraud5.3.1 Asia-Pacific consumers step up to combat card fraud6 Card payment fraud, the banking industry and financial institutions6.1 Latest statistics on card payment fraud6.2 How does card payment fraud impact banks and financial institutions6.3 How banks and financial institutions respond to card payment fraud6.3.1 Card payment fraud risk mitigation6.3.2 Mitigation measures and tools used in the US6.3.3 Improving information sharing6.3.4 Establishment of authority agencies against payment fraud7 Overcoming card payment fraud7.1 Dealing with card payment fraud: factors to consider7.1.1 Types of card payment fraud7.1.2 Vulnerable data management systems in the card payment industry7.2 Battling fraud: barriers and challenges7.2.1 Real time information sharing7.2.2 Individualised fraud departments7.2.3 Prompt fraud detection7.3 Fighting fraud across the globe: specific standards and procedures7.3.1 Europe: regional collaboration to combat fraud7.3.2 United Kingdom: fraud rates decreasing7.3.3 Fraud detection software and prevention solutions7.3.4 Updated chip cards and increased use of chip and pin technology7.3.5 US: taking a different route to fight fraud7.3.6 Payment Card Industry Security Standards Council: a co-operative effort to help reducefraud7.3.7 Contactless payments cards – a measure similar to the chip and pin technology8 Technologies in use to reduce and eliminate card payment fraud8.1 Fighting fraud through EMV/Chip and pin cards8.1.1 Magnetic stripe cards to be replaced by chip and pin cards8.1.2 US debate on migrating to chip and pin cards8.1.3 Chip and pin cards improvements8.2 Terminal line encryption to reduce domestic counterfeit fraud8.2.1 How Malaysia benefited from terminal line encryption technology8.3 Technologies behind one-time payment cards in combating card payment fraud8.3.1 A deeper look into one-time card number technology9 Legal authorities speak on how to deal with card payment fraud9.1 Payment card industry council: fighting fraud from start to finish9.1.1 Focusing on increasing card skimming cases9.2 National Fraud Authority – fighting fraud together9.2.1 Information sharing among members of the payments industry
  • 5. 9.3 Combined effort of all industry leaders, stakeholders and associations9.3.1 Working together in the fight against fraud9.3.2 Improving knowledge and information against fraud10 ConclusionList of TablesTable 1: Card fraud evolution in Europe; 1980-2010Table 2: Average total losses per fraud in various regions and sub-regions worldwideTable 3: Annual plastic fraud losses on UK-issued cards (2006-2010)Table 4: Comparison of the security features of the US contactless payment cards, chip-and-pincards and magnetic strip cardsTable 5: Worldwide adoption of EMV/Chip-and-Pin cards and terminalsTable 6: Security advantages of one-time payment cards over magnetic strip cards and othercontactless payment cardsList of FiguresFigure 1: Comparison of Non-Cash Transactions by Region and Changes in PaymentsInstruments mix, 2001 vs 2009Figure 2: US In-Store Payment Transaction Mix 1999-2010Figure 3: Global Card Fraud and Global Card Transaction Values, 2001-2009Figure 4: Percentage of Organisations Subject to Attempted or Actual Payment Fraud, 2004-2010Figure 5: Fraudulent Application Cases in Australia and Overseas on Australian-Issued CardsFigure 6: CNP Fraud Losses on UK-Issued Cards Dropped by 15% in 2010Figure 7: Fraud Losses on UK-Issued Cards 2000-2010Figure 8: Price Shares of Heartland Payment Systems Before and After Data BreachFigure 9: European Card Fraud Loss RatesFigure 10: Fraud Losses in Various Types of Card Payment Fraud in France, 2007-2009Figure 11: Fraud Losses in Various Types of Card Payment Fraud in the United Kingdom, 2007-2009Figure 12: Card Payments Fraud Losses in the UK, 2000-2010Figure 13: Lost and Stolen Fraud Losses in the UK, 2000-2010Figure 14: US and UK Fraud Losses in the UK, 2000-2010Figure 15: Fraud Figures in the UK, 2004-2008 – A Comparison Before and After Chip-and-PINCards Were ImplementedFigure 16: Domestic Counterfeit Fraud Rates in Malaysia 2004-2005Figure 17: Credit Card Fraud Rates in Malaysia, 2004-2008Figure 18: Most Effective Ways to Prevent Fraud, Information Security Media Group SurveyContact: for more information.