J.P. Morgan has issued a report titled “Payments Fraud: How It Happens And What You Can Do To Protect Your Organization” in which the company shares best practices for battling check, automated clearing house (ACH), and credit card fraud, as well as tips on protecting treasury operations from advanced phishing techniques. The report also explores the key areas of fraud vulnerability and proliferation, and reviews fraud protection products and services available today. READ MORE »

CyberSource has announced the results of its latest annual survey of eCommerce fraud finding that "merchants in 2009 were fighting back against fraud, and seeing considerable evidence of success. U.S. and Canadian merchants expect to lose about $3.3 billion to eCommerce fraud this year, down from $4 billion last year. This is the first drop in estimated revenues lost since 2003. The percentage of revenue merchants predict they will lose in 2009, on average, is 1.2%, the lowest estimate in the 11-year history of the survey." READ MORE »

An updated version of "Inside Fraud" published by Payments, Cards and Mobile and sponsored by Visa Europe is now available online.

The report finds significant variations in losses between France, Netherlands, Spain and UK with losses much higher on internet and international transactions. The report suggests there is an "urgent need to complete roll-out of EMV and continue implementation of online security measures."

Taking Visa Europe’s figures as a barometer for the region as a whole, card fraud losses fell from 0.07% (7 basis points) of card turnover in 2007 to 0.06% in 2008. But comparing national figures for France, Spain, Netherlands and the UK, losses ranged from fewer than 3 basis points of card turnover in Spain to 10 basis points in the UK.

Further, the picture is not static. In Holland, which historically had one of the lowest levels of card fraud in Europe, the loss rate has risen almost threefold during the last four years. With Dutch debit card transactions still 100% based on magnetic-stripe cards, losses continue to rise due to skimming. In contrast, UK figures for first half of 2009 show total card fraud losses down 23% to £232.8 million.

You can download the full report here.

New findings announced by Moneris Solutions, Canada's largest payment processor, reveal that "merchants who process chip card transactions are experiencing fewer chargebacks than ever before due to increased security and fraud detection. This is the first data of its kind from Canada and demonstrates that chip cards reduce fraud and chargebacks." READ MORE »

First Data and Accertify have announced an agreement to integrate Accertify's fraud prevention platform with First Data's eCommerce processing gateways and platforms.

According to the two companies, "the integration of Accertify's Interceptas® platform will provide First Data with a comprehensive, end-to-end fraud deterrence solution. This solution will equip First Data's customers with tools to help mitigate risk and reduce losses associated with fraud. The solution also eliminates the need for merchants to deploy separate payment and risk platforms. First Data will offer this combined solution to its 300,000 merchants around the world that sell goods or services over the Internet and in a card-not-present environment." READ MORE »

According to a new report released today by LexisNexis® Risk Solutions, U.S. merchants are incurring $191 billion in fraud losses each year. The 2009 LexisNexis® True Cost of Fraud Benchmark Study discovered that merchants must absorb nearly 10 times the identity fraud cost incurred by financial institutions. Retail merchants experience a massive $100 billion in losses solely attributed to identity fraud, which escalates to $191 billion when factoring in the additional cost of lost and stolen merchandise. The study also found that merchant fraud losses amounted to more than 20 times the total value of consumer fraud victim losses which totaled approximately $4.8 billion in 2008. READ MORE »

Verifi and Merchant e-Solutions (MeS) have announced a partnership to "jointly deliver a next-generation technology solution for risk management and payment processing. Integrating Verifi’s suite of fraud prevention services with Merchant e-Solutions’ innovative payment platform equips card-not-present (CNP) merchants with a powerful set of risk mitigation and business management capabilities." READ MORE »

The Smart Card Alliance has released a new white paper titled "Fraud in the U.S. Payments Industry: Fraud Mitigation and Prevention Measures in Use and Chip Card Technology Impact on Fraud" developed by its Contactless and Mobile Payments Council.

"Criminals are known to exploit the weakest link in a payments infrastructure. With issuers in the rest of the world moving to EMV, it is likely that criminals are going to move counterfeit card activities to the U.S., attacking both U.S. and international issuers," said Randy Vanderhoof, executive director of the Smart Card Alliance. "If the United States wants to avoid an incoming tide of higher loss, the industry must be willing and able to make investments in emerging technologies." READ MORE »

Financial Fraud Action UK, the voice of the industry in the UK for financial fraud matters, (previously known as APACS) has published the latest payment industry fraud losses for the first half of 2009, in conjunction with The UK Cards Association and the Cheque and Credit Clearing Company.

By fraud category, here are the results:

• Card not present - £134m (down 18% vs first half 2008)
• Counterfeit cards - £46.3m (down 48%)
• Lost or stolen cards - £25.1m (down 6%)
• Card ID theft - £23.9m (up 23%)
• Card lost in post - £3.5m (down 33%)
• Total - £232.8m (down 23%)

The fraud to turnover rate on debit and credit cards amounted to 0.1 per cent in the first half of the year – reflecting the fact that around a tenth of a penny is lost to fraud in every £1 spent on cards. READ MORE »

An Adeptra survey of US consumers has found that "the majority of US consumers want their credit card issuer to call them on their cell phones to alert them of possible suspicious transactions. When asked if they had more faith in their card issuers' abilities to prevent fraud or resolve fraud should it happen to them, consumers favored slightly towards the ability to prevent fraud, with 6% stating they had a greater confidence in fraud prevention over fraud resolution." READ MORE »

Fiserv has announced the availability of Fraud Risk Manager 4.6, the newest version of its multi-channel fraud detection and management solution. Also available is AML Manager 4.6, the market-leading anti-money laundering solution.

"Both Fraud Risk Manager and AML Manager from Fiserv are designed to enhance and optimize financial institutions’ financial crime risk management operations, by delivering best-in-class fraud and anti-money laundering (AML) transaction monitoring solutions, integrated with a common platform for automated alert intelligence and investigation, case management and regulatory reporting." READ MORE »

Verifi has announced new enhancements to the IP Intelligence™ capabilities of its fraud prevention and risk management platform. Verifi’s IP Intelligence solution provides IP geolocation information, a key indicator of transaction risk and credit card fraud. In concert with Verifi’s suite of tools, IP Intelligence provides merchants with a comprehensive set of real-time fraud checks for online orders. READ MORE »

ACI Worldwide has released the findings from a global consumer fraud survey that highlights the areas that banks need to focus on following a card fraud incident.

"The most important factor to ensure customers were happy with their bank after they were hit by fraud is how quickly any stolen money was reimbursed. However, just under a third of those surveyed also judged their bank’s customer service by how quickly they identified a fraudulent transaction. For a quarter of respondents it was most important that the financial institution identified the fraud before they did." READ MORE »

Albert Gonzalez, 28, of Miami, pleaded guilty today to 19 counts of conspiracy, computer fraud, wire fraud, access device fraud and aggravated identity theft relating to hacks into numerous major U.S. retailers including TJX Companies, BJ's Wholesale Club, OfficeMax, Boston Market, Barnes & Noble and Sports Authority. Gonzalez was indicted in August 2008 in the District of Massachusetts on charges related to these hacks. More than 40 million credit and debit card numbers were stolen from major U.S. retailers as a result of the hacking activity.

Gonzalez also pleaded guilty to one count of conspiracy to commit wire fraud relating to hacks into the Dave & Buster's restaurant chain, which were the subject of a May 2008 indictment in the Eastern District of New York. The pleas in both cases were entered before U.S. District Court Judge Patti B. Saris in federal court in Boston. READ MORE »

In an article titled "Defying Experts, Rogue Computer Code Still Lurks", John Markoff writes for the New York Times about the Conficker virus - first detected last November which now has some five million computers around the world under its control. "Wherever the authors are, the experts say, they are clearly professionals using the most advanced technology available."

In an article titled "3 Indicted in Theft of 130 Million Card Numbers", Brad Stone reports for the New York Times on yesterday's indictment by the US Department of Justice of Albert Gonzalez, 28, of Miami and two unnamed Russian conspirators. The three were charged with stealing more than 130 million credit and debit card numbers from several different merchants and processors. A copy of the indictment containing the charges is available online.

Fraud detection tools and payment fraud losses are top of mind according to a recent webinar and poll of airline fraud investigators. The survey results, released by 41st Parameter report insufficient rules and defense mechanisms in place at most airlines. The results forecast the continued emergence of new reservation booking vehicles and a shift in the payment landscape. READ MORE »

In an article titled "U.S. magnetic stripe credit cards on brink of extinction?", Beverly Harzog writes for CreditCards.com about the potential effects of a ban on mag stripe cards being considered by the European Payments Council.

Harzog takes a comprehensive look at the implications of such a move on US card issuers and their cardholders traveling to Europe - as well as exploring whether the US will eventually need to move from mag stripe-based cards to the Chip and PIN technology deployed in Europe and, increasingly, in other markets around the world.

In February of this year, the Reserve Bank of India adopted new rules on credit and debit card transactions within India that became effective today, August 1, 2009. The rules require India's banks to support two basic capabilities:

• A system of providing for additional authentication/validation based on information not visible on the cards for all on-line card not present transactions (e.g., Verified by Visa or MasterCard SecureCode)
• A system that provides "Online Alerts" to the cardholder for all 'card not present' transactions of the value of Rs. 5,000 (about US$104) and above

Here's an example of one card issuer's approach (Barclaycard) to educating its cardholders. Note the Q&A: "Can I opt out of VBV? No, this is not optional. All online transactions will have to go through VBV process."

In an article in yesterday's edition, India's Economic Times reported that "bankers hail additional authentication for card purchases" - noting that "customers will have to register their cards from tomorrow onwards with the respective merchants--Visa or Master Card and create a security password." A followup article in tomorrow's edition of the Economic Times asks whether the new mandate goes far enough!

ACI Worldwide has announced that its recent global card fraud survey found that "18 per cent of consumers questioned have been victims of credit or debit card fraud in the past five years. The research, of more than 2,400 consumers across eight countries, also found that if an individual or someone they knew was hit by card fraud, 22 per cent would change financial institutions, and a further 27 per cent would consider changing financial institutions." READ MORE »

On the New York Times Bits blog, Saul Hansell writes about PayPal's fraud risk management techniques - noting that "you may not have ever bought anything with PayPal, but it’s got a file on you anyway, just in case."

Accertify has announced that its Interceptas platform has been chosen by eHarmony, the online service that uses relationship science to match singles seeking long-term relationships. READ MORE »

Verifi, Inc., a provider of transaction risk management services for card-not-present merchants, has announced that Jennifer Schulz has been appointed CEO effective immediately. Schulz succeeds the company’s entrepreneurial founder Matthew Katz, who will remain an active part of the company as Verifi’s Chairman. READ MORE »

FICO has announced the general availability of its Falcon Fraud Manager 6.0 - saying "it is the first payment card fraud management solution to incorporate adaptive analytics, an innovation that accelerates financial institutions’ ability to spot new fraud patterns and prevent them from causing extensive damage. Early response to this innovation has been enthusiastic, with multiple projects already underway, including an installation at a major, U.S.-based credit card issuer." READ MORE »

CyberSource has announced the availability of its Airline Online Fraud Report, a study of the impact of online fraud on the airline industry. CyberSource commissioned the study in association with Airline Information LLC. It can be downloaded at: http://forms.cybersource.com/forms/airlinefraudpr. READ MORE »

CyberSource has announced that its Authorize.Net small business solution will be releasing a new Advanced Fraud Detection Suite (AFDS) - calling it "a robust, rules-based fraud detection system that allows online merchants to identify and handle suspicious transactions using multiple filters, tools and custom settings." READ MORE »

TowerGroup is predicting that US branded total card credit losses will peak at $55.6 billion in 2009 because the recessionary economic conditions are making it difficult for consumers to repay credit card debt. TowerGroup's Brian Riley points out, however, that not all losses are the result of honest inability to pay, warning that intentional cardholder losses from abuse and fraud may cost the industry as much as $10 billion. READ MORE »

Guardian Analytics, a provider of online account fraud prevention software for financial services institutions, has announced the appointment of Terry Austin to chief executive officer, effective immediately. Austin succeeds company founder Tom Miltonberger, who will focus on the future direction of Guardian Analytics’ products. The company also announced today that security industry veteran Irfan Salim, president and CEO of MarkMonitor, has joined the Guardian Analytics board of directors. READ MORE »

41st Parameter has announced that US Airways has selected FraudNet to detect and prevent Card Not Present (CNP) fraud across multiple reservation channels including online, kiosk and phone. READ MORE »

The Bank Fraud Forum Blog has been launched by Memento Security.

Fraud is a serious issue that deserves serious discussion. The Bank Fraud Forum℠ has two primary objectives: 1) to convey insights, opinions and comments on the world of financial crime, and 2) to serve as an open, albeit virtual, forum for the fraud fighting community. Our goal is to offer intelligent, timely and thought-provoking analysis of trends, news, best practices and more.