Credit card fraud expected to increase as banks instructed to use real-time monitoring

Financial institutions and credit card processors are anticipating a rise in fraud for this year.

According to a recent survey by Actimize, 69 per cent of banks had seen an increase in credit card fraud in 2007 and 2008, and 81 per cent of respondents claimed that there would be an increase in fraud this year.

Bruno Piers De Raveschoot, VP and head of Europe at Actimize, claimed that the reason for this rise was due to cards now being used more than in the past, and people using cards without care due to the rise of e-commerce.

De Raveschoot, said: “Skimming, or mass compromise – it is becoming more and more of a problem, it is a lot more sophisticated than two years ago but they cannot get the PIN. On average it takes seven days to detect fraudulent activity and stop it.”

He claimed that one of the key problems is that fraud detection monitoring and the card distributors do not talk to each other, and only 26 per cent of banks monitor transactions in real-time – others will do it at midnight and others the next day.

De Raveschoot also claimed that replacement cards are a cause of fraud, as a hacker can ask for a replacement card to be sent out for an account once they have stolen details.

“Twenty per cent of all cards are re-issued but banks and processors do not know why it was re-issued”, said De Raveschoot. He further claimed that banks need to use a multi-channel tracking device to monitor suspicious activity, and work towards it being flexible and in real-time.

Source : SC Magazine UK, By Dan Raywood.