FICO, a provider of predictive analytics and decision management technology, today released data from the FICO Falcon Fraud Manager Consortium. The analysis shows a continuing shift towards online, mail-order and telephone-order fraud, as compared with counterfeit fraud over the same period.
From January 2010 to September 2011, FICO found that card-not-present fraud losses increased at twice the rate of counterfeit card losses. However, though card-not-present fraud accounted for the highest total fraud loss and fraud volume, counterfeit fraud has higher average loss per compromised account.
The expected introduction of EMV technology in the US promises to boost protection against counterfeit losses. FICO released data in January on European credit cards that showed a 60 percent decline in counterfeit fraud, due in large part to the implementation of chip and pin technology in the U.K.
FICO's analysis shows that debit card use increased sharply over the half-year period, with a 15 percent increase in overall authorization volume (more people are using debit cards). The data also revealed an increase in techniques such as skimming. The top three sources for debit card fraud were ATMs, grocery stores and automated fuel dispensers. The top merchant categories for credit card fraud were grocery stores, restaurants and online retailers.
"Continued improvements in fraud controls have succeeded in keeping the fraud genie in the bottle; but fraudsters continue to evolve their attempts to circumvent our efforts, adapting to consumer behavior and simply following the money," said Doug Clare, vice president of product management at FICO. "More online shopping has created a shift towards more online fraud, which is proving to be a popular, relatively safe and anonymous means for fraudsters to exploit any weakness in fraud systems. Consumers and issuers should remain diligent when using cards for point of sale and ATM transactions."
The data in the FICO Falcon Fraud Manager consortium represents hundreds of millions of active credit cards and debit cards issued in the US.
For more on this topic, visit the trends/statistics research center.
However, this kind of fraud is a thing of the past, thanks to a novel authentication method, being implemented by two U.S banks, and one in Hong Kong.
Picture this scene:
•Your ATM card is stolen, on the back of which you have written your PIN number.
•Together with this, they stole the piece of paper, on which you wrote your online banking User ID and password.
•To make things worse, a spy camera watched your last access.
•A keylogger also recorded each keystroke
•So did a network snooper
Ordinarily, this would not be a Good Situation. However, if your bank is incorporating the authentication method shown at
www.designsim.com.au , there is no way the thieves can access your accounts.
The site features a fraudproof ATM and online trading application on the demo pages, along with a nice PowerPoint description of how it works, at www.designsim.com.au/What_is_SteelPlatez.ppsx.