EU Action Plan to tackle card fraud

EU Action Plan to tackle card fraud

The European Commission has launched a three-year Action Plan designed to crack down on the growing problem of fraud and counterfeiting on cards and other non-cash means of payment widely used for cross-border transactions.

The Commission says such fraud currently amounts to an estimated €600 million a year in the European Union (approximately 0.07% of the industry's turnover), and undermines confidence in the EU internal market. Last year fraud grew by approximately 50% with most of the increase coming from payments made by phone or across the Internet.

Internal market commissioner Frits Bolkestein comments: "The rate of increase in fraud and counterfeiting of payment cards concerns us all. To date the counter-attack has mainly focussed on domestic payments, but the scale of cross-border fraud means we need urgent action at a European and, indeed, international level."

Bolkenstein believes the Commission can play a useful role in establishing systems to ensure better information exchange, stronger cross-border co-operation on co-ordinated preventative measures, and clear and binding rules with adequate sanctions for those found to break them.

The new rules have been drafted in consultation with the payment card industry, national authorities, retailers, network operators and consumer groups and will run initially until the end of 2003, when the Commission will report on progress achieved and propose further action as necessary.

Specifically, the proposals call for:
* the introduction of a single phone number, operational in all EU Member States (or at least a single phone number for all issuers based in each Member State) so as to make it easier for consumers to notify the loss or theft of their cards;
* the publication by the Commission, in co-operation with national data protection authorities, of guidelines on conditions for exchange of information related to fraud prevention;
* the setting-up of an EU-wide fraud prevention Web site with information on initiatives and links to all relevant organisations; and
* the introduction of specific initiatives to improve security of payment products and systems based on the findings of a Commission study on specific security aspects.

The Commission says it will work with international authorities to push for the implementation of a set of global standards.

Bolkenstein says: "This Action Plan sets out a framework for better co-operation and co-ordination. Criminals commonly use sophisticated techniques to commit fraud and counterfeiting. They have repeatedly shown their ability to exploit any weak link in the chain. We must work together to beat them at their own game."

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