Skimming: Dismantling of an International Network
- Europol has just dismantled an international skimming network suspected to have stolen some 50 million dollars from banks and from their customers. The international organisation now turns to the United States, requiring favourable moves towards the adoption of EMV.
- A large-scale operation, codenamed Night Clone, allowed police forces to arrest many suspects in Bulgaria, Italy, Spain, Poland as well as in the United States. In Bulgaria, 47 suspects were arrested and some 150 police officers were mobilised (out of the 200 dedicated to these operations). The leaders of this network were also linked to criminal cells in Kenya, South Africa and in the US.
- The cards skimmed in Europe were used by paid intermediaries to withdraw Cash in non-EMV countries (including the US).
- The US Federal Reserve Bank of Atlanta is now trying to talk other players into implementing the EMV standard, and insists on how this evolution would be beneficial both to prevent fraud and to satisfy all customers travelling outside of the US.
- Fraudsters take advantage of compliance gaps as well as of a certain lack of consistency regarding the application of standards on a global scale.
- In Europe, the migration to EMV is virtually completed. The 7Th SEPA progress report published by the ECB in October 2010 recommends that as from 2012, all cards issued within the SEPA zone be EMV-compliant. In the United Kingdom, the UK Card Association notes that these developments (anti-skimming equipment, adoption of EMV, application of security regulations by retailers, increased awareness of the cardholders, etc.) contributed to a reduction in the number of skimming fraud cases (-41%).
- Considering the weight of habits (magnetic stripe cards) and the cost of the migration, the United States is still behind schedule. However, in line with the current concerns with card transaction security, several US banks gradually make the decision to migrate to EMV. Citi, for example, stands as a pioneer and launched its first EMV cards in October 2010. The Bank retains the same upselling strategy and recently launched the EMV-compliant Executive/AAdvantage card.
- Some US banks sometimes seek help from European players for their migration. A study has recently been conducted by the UNFCU and Gemalto revealing an increase in EMV compliant cards orders (+153%), as well as in the customers satisfaction level and the amount spend between October 2010 and February 2011 (vs. 2009-2010).