Card Not Present (CNP) Fraud Rising as a Result of More Sophisticated Anti-Fraud Technology?
September 19th, 2009 by Max AnhouryA recent report seemed to imply that recent rises in Card Not Present (CNP) fraud in the UK was correlated with their efforts to mandate CHIP and PIN technology to fight face to face fraud.
Despite widespread adoption of the new technology and expected decreases in credit card fraud, there was instead a dramatic increase in fraud recently. Creditcardsweb.co.uk reports:
“Last year the value of credit card fraud in the UK came to a massive £610 million, which reflected a rise of 43 percent in the space of just two years.
Whilst CHIP and PIN technology was brought in to provide increased protection for consumers who were using their cards on the High Street, no such protection is in place when using a card to make online or telephone transactions, and this is why fraud in these areas has risen so sharply over recent years.”
Certainly online fraud is rising at an alarming rate, but there is way more to this trend than a simple response to a card present anti-fraud technology. CNP fraud is on the rise because it is far more profitable and safe than in person fraud. It is easy to see why:
- There are no video cameras online
- There is no signature required
- There are no security guards
- I don’t have to drive to a new store to use a credit card a second time
- I am not constrained by my geography
- I can use multiple cards to purchase goods and they don’t know I’m the same person
- Online credit card fraud is rarely successfully prosecuted
The list goes on and on. I think the lesson from this is not that new fraud fighting techniques like CHIP and PIN, or pictures on your credit card, or whatever it might be are driving fraud online. The lesson is that any technology that is intended to fight credit card fraud must account for Card Not Present situations which are more common than ever.
Tags: CNP Fraud, fraud prevention, Online Fraud
