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European card fraud reaches new highs

FICO's latest European card fraud map shows losses from 2006–2013 for 19 countries, and across five categories, including counterfeit fraud, stolen card, and ID theft.

August 4, 2014

FICO has published its latest map of card fraud in Europe, showing that card fraud losses in 2013 for the 19 European countries studied reached €1.55 billion ($2.08 billion). This figure was a new high, and slightly more than the previous peak in 2008, according to data supplied by Euromonitor International, a provider of global strategic market intelligence.

While the U.K. experienced £450 million ($758 million) in losses, the highest level since 2008, both France and Greece had higher ratios of fraud losses to card sales, at 7 basis points (.07 percent). The fastest growth of card fraud losses in Europe occurred in Russia, where losses have jumped nearly 28 percent since 2012.

“When fraud losses peaked in 2008, U.K. issuers sharply reduced card fraud through chip and PIN and fraud analytics,” said Martin Warwick, a principal fraud consultant at FICO in EMEA. “However, tougher fraud detection policies and thresholds also block more genuine transactions, and now the focus for U.K. banks and regulators is very much on improving the customer experience. To counteract the resulting increase in fraud, we’re beginning to see issuers look to such technologies as interactive, automated customer communication services that contact customers in real time when a transaction triggers a fraud alert. This technology helps balance the need to protect customers from fraud with the need to provide a positive purchase experience.”

The U.K. and France comprised 62 percent of total fraud losses for the 19 countries in the fraud map, reflecting their higher rates of card use, which make them targets for criminals. Ten of the countries saw a rise in fraud compared to 2012, while nine stayed the same or realized reduced losses.

"Unfortunately, many organizations do not maintain continuous investment in fraud prevention systems and staff — they invest only when the problem grows," Warwick said. "The companies and countries that aren’t investing this year will be the new targets for criminal activity.”

The card fraud map can be viewed at www.fico.com/landing/fraudeurope2013. The graph below provides basis points for card losses across 19 European nations.

European Card Fraud Levels in 2013
Basis Points = Card Losses Due to Fraud / Card Sales