Growth in European Card Fraud Fueled by Card-Not-Present Transactions
According to the latest FICO report, card fraud in Europe only grew by 6% in 2014. A majority of this increase was due to cross-border fraud, with domestic losses remaining relatively flat.
While this number shows promise for the continent’s card protection programs, it does not emphasize the severity of card-not-present (CNP) fraud.
70% of fraud cases in the UK were the result of card-not-present transactions, and cross-border fraud is becoming an equally alarming issue to control.
In the UK, card fraud losses only increased by £29 million in 2014, the same 6% as fraud losses for all of Europe. However, CNP losses have risen significantly, from 54% of overall fraud losses in 2008 to 70% in 2014. By comparison, card-not-present fraud losses accounted for 41% of the total fraud losses in Western European countries, and only 23% in Eastern European countries.
“We are winning the war on CNP fraud, but we still have a long way to go to get CNP fraud fully under control. Authentication of customers and their devices will play an ever-increasing role,” said Martin Warwick, fraud chief in Europe for FICO, said. “This is why FICO has been focused on advances in analytics that assess consumer behavior, and profile not just cardholders but also devices and merchants.”
The three European countries with the highest percentage of card fraud were France, Greece and the United Kingdom. Russia reported the biggest increase in fraud losses at 24%, but this may be due to a 36% increase in card sales during that same time period.