According to ReD, 2009 defied the trend of the last five years, during which time CNP (card not present) fraud grew consistently. The rise is due to factors such as a greater number of credit and debit card details being exposed to online criminals, as more customers choose to make purchases away from the high street and the data compromises of recent years. In total, CNP fraud now accounts for over 50% of plastic card fraud losses, as opposed to approximately 10% in 1998, when overall fraud totalled just over GBP100m.
ReD’s forecast for 2010 suggests that total CNP fraud will be valued at GBP264m, as the decline experienced in 2009 continues to a lesser extent in 2010. However, the same reduction is not expected for 2011. More retailers are now protected by fraud screening solutions, but fraudsters are adapting to overcome these new challenges.
ReD said that, to ensure the best possible protection against fraudsters and maintain the best levels of customer service, retailers should opt for non-intrusive, instantaneous fraud prevention technologies.
ReD claimed that its fraud prevention uses an array of tools and strategies to check numerous characteristics including the customer’s spending habits, geographical location, personal details and many more, in less than a second. For retailers this means greater confidence in combating CNP fraud, and a seamless way to improve the customer experience.
Carl Clump, CEO of ReD, said: “The positive impact of current fraud prevention technologies will still factor in 2010. We estimate a further 5% reduction in the value of CNP fraud throughout 2010. However, this downturn is unlikely to be ongoing. A return to previous growth trends in CNP fraud is expected for 2011, as fraudsters find more creative ways of conquering new security measures and tightened regulations.
“Payment fraud is an organised crime that will continue to evolve on a global scale. Despite constant innovation in fraud prevention, thieves will undoubtedly remain persistent in finding new avenues to perpetrate their trade, the latest of these being the migration to online channels like smart phones and ultra-portable laptops, which allow consumers constant access to online shopping sites.
“For consumers, the growth in mobile commerce brings greater convenience. However, for the fraudster, it brings an expanding payment landscape to attack. ReD’s role remains in being vigilant to new forms of fraudulent attack and protecting retailers at risk.”
