Travel companies are amongst the most at risk from the growing problem of online card fraud, according to First Data Merchant Solutions director Tony Mooney.
Although card fraud has fallen over the last 10 years , due largely to the introduction of Chip & Pin, more businesses are being hit by fraudsters using stolen or cloned cards to buy goods and services on the internet and over the telephone, he said.
Speaking at the inaugural Elman Wall Travel Directors' Summit, Mooney said that although he didn't have an industry-by-industry breakdown, he thought the travel industry must be suffering more than most. "A lot of travel is sold remotely and that is where a lot of fraud is occurring, so the travel industry is probably suffering more fraud than the average."
While Chip & Pin has helped to virtually stamp out face-to-face fraud, no similar security exists for online sales. Banks are working on transferring Chip & Pin to the internet, said Mooney, but the technology is still a long way off.
About 0.12% of card payments are fraudulent, which is a lower percentage than in 2001, but retailers must stand the losses if they are stung by telephone or online fraud, which accounts for an increasing number of rip-offs, whereas if retailers fall victim of counter fraud, it's the card issuer who pays.
At the moment, retailers' best defence against fraudsters operating on the internet is to use 3-D Secure, which is an added layer of security for online credit and debit card transactions, whereby card holders are asked for an additional password to complete a transaction. Mooney said older systems, such as account verification and adding a security code (CPS) to cards had not been effective. Indeed, in the years after they were introduced, prior to Chip & Pin, card fraud 'went through the roof' he said.
Friday, September 23, 2011