Skip to content

What is being done about card fraud?

Avatar

by Sarah Orrill

29/12/10 in Card Fraud/Theft |

The Government, banks and card issuers take card fraud prevention very seriously, since it costs them millions of pounds every year.

Chip and PIN

The most well known measure put in place to help prevent the fraudulent use of stolen cards is Chip and PIN. This technology combines two very effective security features. Firstly, the 'chip' or microchip on the card stores personal card data much more securely than the magnetic stripe on the back of the card, making it much harder to counterfeit. Secondly, the four-digit PIN (Personal Identification Number) is used to prove that the person using the card is the genuine cardholder.

Cardholder-not-present fraud

Chip and PIN has been very successful at reducing card fraud where the customer is present at the point of payment. However, cardholder-not-present fraud, where goods or services are paid for remotely either online, by telephone or by mail order, is still a major problem. The following initiatives have been brought in to try to tackle this type of fraud:

1. Card Security Code (CSC) and Address Verification System (AVS)

The Card Security Code (CSC) is printed only on the back of your debit and credit cards. It does not appear on any receipts or card statements. It means that only the person in physical possession of the card will know it. When you make a purchase by phone, mail order or online, you will be asked to quote the last three digits of the CSC. You should never quote your CSC to anyone other than a genuine retailer or your bank or card issuer. They will ask you for it in order to verify your identity. They will also ask you for your address, enabling them to check that it matches the address registered with the card. In combination, CSC checking and address verification (AVS) enable retailers, banks and card companies to verify that you are the genuine cardholder.

2. Verified by Visa® and Mastercard® SecureCode™  

These two schemes are secure online payment systems that prevent criminals from using stolen cards or card details for internet transactions. They are password-protected services that enable financial institutions to confirm your identity for the merchant when you are using a card to pay online. To set up your passwords for these services you are asked to enter personal details that confirm you are who you say you are. When you subsequently make a purchase online you will be asked to enter your Verified by Visa® or Mastercard® SecureCode™ password. This enables merchants to confirm your identity and puts another barrier between criminals and your information. These systems also have the advantage of being global, so should reduce fraud abroad as well as domestic fraud.

3. The Dedicated Cheque and Plastic Crime Unit (DCPCU)

The DCPCU was set up in 2002 to target the organised criminals behind the huge increases in counterfeit card fraud. It has an impressive record of success in identifying, investigating, arresting and prosecuting criminal gangs that perpetrate plastic card fraud. Now fully sponsored by the banking industry, it is staffed by police personnel, alongside fraud investigators and bank staff provided by APACS and its members.

Between 2002 and 2009 the DCPCU saved the banking industry more than £315m through reduced fraud activity, recovered more than 45,000 counterfeit cards and almost 290,000 compromised card numbers. It also secured 240 convictions on fraud-related matters. For more information, visit www.dcpcu.org.uk.

Source 2010: www.cardwatch.org.uk

Be the first to comment

    • By registering your comment here you are agreeing to the CPP Blog code of conduct.

  • *All fields are required

In this section

Latest Articles

Popular Articles