According to the Banking Times article, “Criminals shifting to card-not-present fraud because of chip and PIN success,” they are on the move again. Data recently released by FICO, a leading provider of analytics and decision management technology, shows that across Europe card-not-present (CNP) fraud has dramatically increased, accounting for 72% of all fraud losses between March 2009 and March 2011. The big reason for this change? Chip and PIN technology, which has helped reduce counterfeit fraud by 60% over the same period.

In comparison, a similar study conducted three years ago found that ‘card present’ fraud accounted for 60% of Europe’s credit card fraud. But since European banks adopted the smartcard payment system, that number has dropped significantly over the past couple of years.

So, remaining consistent to their adaptive nature, it appears that cyber criminals have shifted their attention to CNP schemes like online fraud, targeting countries and business systems with weaker detection and prevention capabilities, said Martin Warwick, FICO’s Fraud Chief in Europe, the Middle East and Africa.

“Our analysis of the data shines a spotlight on the tremendous change that has occurred in Europe’s fraud landscape.”

While European credit issuers continue to leverage Chip and PIN technology as part of their defensive strategies to fight fraud, the Merchant Advisory Group (MAG) recently rolled out a recommended roadmap for a U.S. electronic payments strategy that includes Chip and PIN adoption.

Such strategies have proven to help reduce card present fraud, but as the report shows, their success has also pushed hackers into new directions. Instead of using the actual credit card to defraud businesses in person, criminals are collecting credit card and personal information and using it to commit a host of online crimes including CNP fraud, account takeover and identity fraud.

As criminals increasingly pursue online fraud opportunities around the globe, businesses that rely on online payments need effective fraud detection tools that protect the growing number of online transactions taking place within the U.K. and across international borders.

Leveraging our fraud database of more than 800 million desktop and mobile device reputations worldwide, iovation performs 6.5 million device reputation checks a day for our customers. A complementary fraud prevention solution like iovation’s ReputationManager 360 provides businesses with unique intelligence and a deeper understanding of each device accessing their website or requesting a transaction, allowing them to make quicker, better informed decisions on all online transactions even if fraudsters try to re-invent how they defraud businesses over the Internet.

As we inch closer to the holiday season, a pair of recent articles highlight the increasing volume of online transactions that are just around the corner for online merchants. If there is a security takeaway from these trends, it’s that IT fraud teams better be prepared for significant increases in online transactions over the next few weeks.

The first article, “Retailers: Don’t Leave ‘Peak Week’ Money on the Table,” highlights the jump in online traffic over the four-day sales period it terms, “Peak Week.” That’s the time between Black Friday (the day after Thanksgiving) and Cyber Monday (the following Monday). According to analysts at Experian Marketing Services, each of these four days appear in the top 10 for high transaction rates. Other online traffic and retail email data results the marketing group released included:

• In 2010, online traffic to the top 500 retail sites increased 5% during Peak Week over 2009
• Email volume increased 26% in 2010 versus 2009 during Peak Week
• Black Friday online traffic increased 13% in 2010
• Black Friday is the second-biggest day for online email transactions

In the article, “Online Merchants Prepare for Cyber Weekend (Not Monday),” Ken Wisnefski, founder and CEO of the search engine marketing and E-commerce solutions firm, WebiMax, elaborated on the significance of how Peak Week, or what he calls, “Cyber Weekend,” has become much larger than a one-day retail event.

“Online retailers and merchants have largely invested in E-commerce, online ads and ramping up their website infrastructure in 2011. We’re seeing these merchants committed to making it a weekend-long buying experience versus confining the mad-dash to just one day.”

At iovation, our mission is to support our clients’ business growth by securing online transactions through highly effective fraud prevention solutions. iovation is focused on helping our subscribers manage the higher volume of risks that come with peak season online transactions, without negatively impacting the shoping experience for their customers.

As an anti-fraud security provider that helps stop more than 150,000 fraud incidents each day, we understand the importance of efficiently managing high-volume order flows. Making sure that your fraud team is prepared for the growing number of online orders over peak sales periods is critical if you’re going to get the most out of the holiday sales season.

In the article, “Internet fraud’s U.S. price tag put at $550 million,” Donald Brackman, director of the National White Collar Crime Center (NW3C), said the growing figures can be largely attributed to increasingly sophisticated online schemes and cyber criminals’ ability to hide their true identities online.

“Criminals are continuing to take full advantage of the anonymity afforded them by the Internet. They are also developing increasingly sophisticated means of defrauding unsuspecting consumers.”

FBI special agent, Charles Pavelites, added that another reason the numbers continue to climb year over year is the simple fact that more people are using the Internet than ever, which increases the overall pool of online criminals and potential victims.

Findings like these underscore the ongoing need for individuals and businesses to stay on top of emerging threats, take all necessary precautions around unsolicited emails and Web sites they’re providing personal information or making online payments on, and, of course, make sure they’re using the latest anti-virus software and solutions. The key to evolving cyber crimes is the fact that criminals are taking advantage of the latest technology and techniques to defraud anyone they can. Shouldn’t we be doing the same to protect ourselves?

Over the years, online schemes operating out of Nigeria have cost victims millions in fraud losses. The proposed conference of worldwide anti-fraud, economic and strategic Nigerian government agencies and groups will evaluate the country’s electronic payment system and ensure that measures are taken to protect public funds for a new payment system and other online transactions.

The decision to meet in Nigeria was based on statistics that revealed increasing levels of cyber crime globally. Bassey Etim, Coordinator of the National Assembly Anti-Money Laundering and Cyber Security Coalition, said Nigeria’s case is especially disturbing because there is an absence of adequate legislation to protect agencies, corporations and the federal government from falling victim to online fraud.  “The global economy is invaded by cyber crimes and terrorism of which, if urgent steps are not taken to stem down the increasing wave of internet fraud globally, especially in Nigeria, government would be losing so much to cyber criminals.”

The fact that many of the world’s countries are starting to work together to combat online fraud tells me that online fraud is becoming front and center on many political and economic agendas. And that’s a good thing. Meeting in the backyard of one of the world’s most notorious cyber crime hotspots is a big step for the lawless Nigeria, and for the rest of the world, as well.

President Obama makes some important points indicating that our networks and IT infrastructure are important national assets and it is imperative to protect them. Acknowledging the growing strength of online spending, President Obama says, “The Internet and e-commerce are keys to our economic competitiveness.”

Cyber thieves are costing the U.S. and other countries billions of dollars in fraud losses every year; this is in addition to the significant impact that individuals suffer as a result of identity theft and the propagation of malware on personal computers. Obama calls on a public/private partnership to address this threat and secure our networks.

Regardless of your political leanings, providing a safe environment for online business is an important goal for our country and the rest of the world. There is no doubt that our online activities are under siege and jeopardized by an increasing cyber threat. Thwarting this threat and providing a safe environment for online businesses and individuals is a key mission for iovation and our customers.