FICO Targets CNP Fraud in EMV Countries 

Feb. 14, 2013

Analytics provider FICO said its clients in EMV countries are showing “dramatic” decreases in card-not-present fraud losses during the past two years. Study after study have found CNP fraud tends to spike after a country migrates to the EMV payment standard as fraudsters shift their activity from physical stores—where Chip and PIN makes it more difficult to use a cloned card—to the online and MOTO channels, where many merchants don’t have the same level of security. FICO said card issuers using its FICO Falcon Fraud Manager reduced fraud losses from $43.4 million in April 2010 to $18.6 million in March 2012.

“Criminals are migrating to the easiest way of using compromised cards, which today is the Internet,” said Martin Warwick, FICO’s fraud chief in Europe, the Middle East and Africa. “For example, fraud as a percentage of internet sales in the UK is double the rate for credit card transactions overall. In addition, 3D Secure protocols are moving the liability on losses from the retailer to the issuer. This puts great pressure on card issuers to resolve the CNP fraud problem.”

FICO said the data it used in its report comes from card issuers in Germany, Ireland, the Netherlands, Poland, Switzerland and the U.K.