FICO Charts European Fraud Shifts Since 2006

May 14, 2012

Predictive analytics firm FICO recently released an interactive map showing how fraud levels have changed in Europe in the wake of technology changes. Notably, overall fraud levels are down after peaking in 2008 and card-not-present fraud now accounts for two-thirds of all fraud in Europe. As more countries have migrated to chip-and-PIN technology protecting POS transactions, fraudsters have moved away from counterfeit skimming in Europe toward cross-border attacks into non-EMV areas increasing online fraud.

“The rise of chip-and-PIN protection has spurred migration to CNP fraud, where criminals make use of Internet channels that carry less risk than attempting a fraudulent purchase in a shop,” says Martin Warwick, principal consultant and fraud chief for FICO in EMEA. “Response to the CNP threat has been slower, but increased adoption of the 3D Secure protocol—which is used in Verified by Visa and SecureCode by MasterCard for online transactions, and which American Express is now joining—should make a difference.”

According to FICO, the country that made the biggest strides in attenuating card fraud was the U.K., which went from nearly €650 million ($838 million) in fraudulent transactions in 2006 to around €420 million ($540 million) last year. Most of the fraud migrated to France and Germany, which both saw significant increases in payment card fraud in the past five years.