On line credit card fraud is going to soar
I’ve gone out on a limb before. A couple of years ago I warned that Chip and PIN technology was going to cause an increase in on-line fraud. Now we know that I hit a bulls eye on that one. I’ve also suggested a total implosion of the credit card industry. That was a long-term prediction so give it a bit more time but here’s something to think about.
Now that all the sub-prime mortgages have gone sour and the government has started pumping a lot of taxpayer money in to bolster up the banks, we can hope that they’ll tighten up their lending practices. That’s going to make identity theft a bit more difficult. That being the case, I think we’re going to see a lot more credit card fraud. Let’s face it, the bad guys aren’t going to go straight just because it’s a bit harder. They’re just going to take the path of least resistance. That path is straight through the E-Commerce merchant’s home page.
Let’s be careful out there.
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I am constantly counseling people on what to look for when it comes to online fraud. The most aggravating part is how hard the credit card processors and companies make reporting these cases. I spent nearly an hour this morning trying to get through to Anyone at PayPal Pro to let them know they had authorized a possibly stolen card. Still no answer from them. Called Visa - couldn't do anything because I did not have the numbers they needed to identify the issuing bank.
October 21st, 2008 at 11:53 amHi Tom
I agree completely and have noticed a huge increase in my online fraud stats. I used to run at about 3% of TO of CNP fraud. Over the last 12 months this has increased to 5% with the last 3 months seeing an increase to about 6%.
I have noticed a trend, which in the UK is rather worrying especially as most of my customers are stateside. The trend which is hitting us more and more now is cyber shoplifting. People who order goods and check out completely, they get the goods then claim they have not recieved them. EVEN though most of these high ticket items are sent FEDEX they simply say "not my signature" and thats it, the bank gives them my money.
Until the delivery companies are prepared to offer a service of ID Verification for online companies then this will continue to happen. I need FEDEX or UPS to offer a full blown ID verification upon delivery service. I would gladly pay for this service, but thats the weakest link.
And unless anyone has any ideas these people will continue to rip us off with zero comeback. Cyber Shoplifting thats the frightening thing for me as no matter how much I check someone out, all they have to do is lie and they get all their money back.
James
October 21st, 2008 at 12:08 pmDon't you get it? They don't care about rounding up the crooks. They have no liabilty, so why would they devote resources to that effort? Shift the liability to the bank or the association and they'd take your phone call in two seconds -- and actually do something with the information.
October 21st, 2008 at 7:49 pm@ Ben:
That's the beauty of Payer Authentication - Verified by Visa and Secure Code by MasterCard. They shift the liability of "friendly fraud" back to the issuer where it belongs.
October 21st, 2008 at 8:58 pm