Chip and PIN pushes fraud attempts online

Retail Decisions claims case of card-not-present fraud have almost doubled in the past six months

Attempted card-not-present (CNP) fraud has almost doubled since the introduction of chip-and-PIN technology six months ago, according to card fraud prevention company Retail Decisions.

Carl Clump, chief executive of Retail Decisions, said: “With chip and PIN making it harder for fraudsters to target high-street retailers, it was entirely predictable that they would change their focus to online transactions. Resellers are particular targets because items such as laptops and PDAs are high-value and can be turned into cash easily.

“Resellers are not experts in fraud protection so I would advise them to use a specialist firm. Fraud never goes away; it just moves on to the next weakest link.”

Mark Bowerman, spokesman for the Association of Clearing Services, said: “Our latest figures showed that CNP fraud went up by 24 per cent from £122m in 2003 to £150.8m in 2004. Because of chip and PIN, credit card fraudsters will look to migrate to other areas, such as online or telephone transactions, so e-tailers need to be confident that transactions are genuine.”

However, Roger Butterworth, managing director of online retailer eXpansys, said: “We have always had a significant level of attempted fraud. It certainly hasn’t increased since the introduction of chip and PIN. We prefer to hand-check every order; it is the only way to prevent fraud. My advice to online resellers is, if an order looks suspicious, it usually is.”

Simon Brayshaw, finance director at online retailer Dabs.com, said: “We experience an enormous amount of attempted fraud. I wouldn’t say it has doubled since the introduction of chip and PIN, but it has increased. We use an automated system for our transactions and have reduced fraud by 20 per cent over the past 18 months.

“Chip and PIN has been a good thing because it has made people think about CNP fraud and take more precautions.”