Business-to-Business Sales Drive Closed-Loop Prepaid Growth in UK

by Ben Jackson 0

FICO, one of the leading analytics and management software companies, announced earlier this week France had surpassed the United Kingdom for payment card fraud in 2012. While the majority of European countries saw card fraud level rise, France took the crown while accounting for 29 percent of Europe’s total losses. The U.K. checked in at 27 percent.

European card fraud losses overall increased 6 percent in 2012 over the previous year and were driven by higher losses in France, Russia and the United Kingdom, according to FICO. Those countries combined for over 80 percent of Europe’s increase.

Commenting on the news, Martin Warwick, FICO’s fraud chief for Europe said:

“France was the founder of the chip and PIN strategy for Europe, but the UK has taken a particularly tough stance against fraud in recent years, using the latest advanced fraud technology. “Despite a rise of 14 percent last year, UK card fraud losses were still 36 percent lower in 2012 than at their peak in 2008. By contrast, France’s overall fraud losses grew 65 percent between 2007 and 2012, which translated to an additional €174 million of card fraud losses over the period. France also has the highest lost-and-stolen card fraud level of all the countries in Europe.”

France experienced the largest increase in card fraud loss value, but Russia’s fraud has grown the most quickly and now is three times what it was in 2010. Warwick attributes the changing fraud loss destinations to the evolving behavior of fraudsters:

“Any successful reduction in fraud, like that driven by Chip & PIN, typically results in criminals changing their modus operandi to find a different weak spot, and fraud levels starting to climb again. Fraud is like a balloon — if you squeeze it out of one scheme, or one country, it bulges somewhere else.”

The upward trend of card losses in Europe is a bit disconcerting, given Europe, especially Western Europe, are some of the most EMV compliant areas in the world. Although EMV technology represents a considerable advance in security over magnetic stripe cards, the rising fraud losses are a stark reminder of the extreme difficulty in combatting payment card fraud.

Click here to read more from FICO.