Thursday 22 March 2018

Telephone and internet credit card scams net €14m in year

Tom Brady Security Editor

INTERNET and phone scams netted a massive €14m from unsuspecting credit card customers and retailers in a year, according to the latest official figures.

They now account for almost three quarters of all credit card frauds.

The growth of what is known as 'card not present' fraud has been spectacular since the Garda national fraud bureau virtually eliminated the eastern European gangs who controlled 'skimming' rackets at ATMs and in retail outlets.

Garda operations led to the arrest of key Bulgarian and Romanian figures and drove the rest of the criminals involved in skimming out of the Irish market. Gardai believe many of these are now exploiting the market in Scandinavia, while others have moved into other types of fraud.

During 2004 and 2005 skimming, which involves electronically copying account details from an ATM card's magnetic strip onto a blank plastic card, became the fastest growing white collar crime in Ireland.

The offence had not existed here in 2003 but in one eight-month period fraudsters skimmed at least €2m from ATM customers and targeted more than 100 'hole in the wall' machines in the first 10 months of 2005.

But gardai admit that 'card not present' fraud is now by far the biggest problem they confront. The huge interest in shopping online has opened up a lucrative market for the scam merchants who, despite the vigilance of Irish retailers when compared with their European counterparts, are running a successful business.

The cards are being compromised after they have been used by the genuine owners to make online purchases.

The fraudsters operate by either hacking into the websites or dealing with rogue staff at some of the companies, who copy the details of the cards and then sell them.

The gangs usually focus on making overseas purchases with the stolen Irish card details and, according to the gardai, buy large TV sets and other expensive goods, which can be sold later at discounted prices.

They supply bogus addresses to delivery companies and intercept the couriers when they arrive with the goods.

The retailers who have been conned may not find out about their losses until the card transactions go through the banking systems a month later.

Gardai say it is difficult to quantify the full extent of the scams. But the latest figures compiled by the Irish Payment Service Association (IPSO), which represents the payments industry, show that credit card frauds amounted to €19.8m in 2010.

This amounts to a mere 0.08pc of the gross credit card turnover of €22.8bn that year and underlines the steps being taken by the industry and retailers to combat fraud.

'Card not present' (CNP) scams accounted for around €14m, or 71pc, of the overall frauds.

This compares with the 2009 figures, which show that CNP fraud netted €12.4m out of an overall figure of €23.1bn.

The IPSO has advised internet shoppers to find out as much as they can about the retailer before making a purchase and to focus on shops that friends and colleagues had used successfully or they have heard about through trusted sources.

They should make sure their internet access is secured. The beginning of the retailer's internet address should change from "http" to "https" before a purchase is made. This indicates that they are using a secure connection.

Shoppers are also advised to contact their bank or card issuer about a tool known as 3D Secure, which protects mastercard or visa cards against unauthorised internet use.

Irish Independent

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