Card Fraud: UFC Que Choisir Worried about Increasing CNP Fraud Figures
- French consumer association UFC-Que Choisir is worried about current French online card fraud figures: its recent study reminds that online card fraud accounted for 0.276% of national payments and 1.36% of international payments in 2010. By contrast, fraud on face-to-face payments accounted for 0.012% of the overall amount for the same year. The Internet channel only represents 5% of all transactions but generates 33% of the fraud –caused by card data stolen when making online transactions in 62.6% of the cases.
- Meanwhile, UFC Que Choisir mentions the current situation of 3D-Secure in France and blames disparities in the systems set up by banks: these discrepancies do not favour conversion rates and cannot help the adoption of this protocol by merchants (in March 2010, only 13% of French e-merchants had opted for this authentication process). By comparison, in the UK the adoption rate reaches 96%: in direct relation with nationwide unification efforts.
- In its recent publication (Fraude à la carte bancaire sur internet : l’UFC-Que Choisir donne les codes pour une sécurité renforcée !), l'association recommends that:
- Online payment confirmations be systematically sent by banks,
- Customers be notified (by all organisations storing sensitive pieces of information) in case of incident likely to impact their data,
- All fraud cases be centralised (by banks) and be transmitted to legal services,
- A unique, one-time authentication system be adopted in France,
- Discussions opened for EU-wide unifying process.
- According to the Observatoire de la Sécurité des Cartes de Paiement, there were 88.6 million interbank or private label payment cards in France in 2010.
- This evolution corresponds to the global development of the e-commerce sector and card fraud cost reached 370 million euros in 2010 (50% more than in 2002), this increase even exceeds the evolution of the number of payment cards.
- The UFC also mentions different techniques generally used by fraudsters to retrieve card numbers they latter on sell (generators, phishing, spyware, etc.)
- The association also incriminates late refunds of fraudulent transactions (when it occurs), the cumbersome administrative processes to be completed by customers and the additional costs they have to cope with. UFC-Que Choisir also point out weaknesses in the banks’ risk management approach, inherent to their business, and fraud management; it requires that banking institutions take financial responsibility to relieve exceeded and distressed customers for these loses.