Report: U.S. CNP Fraud Growth Accelerating, Promises to Get Worse with EMV
The growth rate of card-not-present fraud in the U.S. was nearly double that of counterfeit fraud in the last 20 months, and that’s before the coming EMV migration threatens to siphon even more fraud to CNP channels, according to data and analytics firm FICO. The San Jose, Calif.-based company that pioneered consumer credit risk scores said the companies in its Falcon Fraud Manager Consortium showed a 25 percent bump in card-not-present fraud between January 2011 and September 2012, while fraudulent transactions using counterfeit cards at physical locations grew by 14 percent.
“CNP transactions are very convenient for consumers, but CNP fraud can be especially complicated to combat,” said T.J. Horan, vice president of global fraud solutions at FICO. And, he continued, “as EMV standards get implemented in the U.S., we know that fraud will migrate as it has done in other regions of the world.”
The FICO numbers confirm a trend seen in other research: that card-not-present fraud is on the rise . Experts also agree that attention to this area of fraud needs to ramp up considerably given the experience of other countries that have migrated to the EMV card standard. In just about every geography where EMV has been introduced, fraudsters have turned to the card-not-present channel, where detection becomes more difficult.
As Jim Van Dyke, CEO of Javelin Strategy & Research put it in a recent interview with CardNotPresent.com: “So, the space that’s been hit the hardest is going to actually get hit harder yet in the next year or two.”