Card Fraud Surges in Europe

The headline in European Card Review reads, " Card-related crime is the fastest-growing criminal activity in the UK-and throughout Europe; payment card systems are under unprecedented attack from well-organized and financed criminal gangs." Payment systems throughout Europe are under attack by "Russian criminals, characterized by highly technical sophistication, including access to systems designed by FAPSI, the Russian state cryptographic agency." One expert is quoted, "There are 200 senior Russian criminals living in Britain and around £20 billion laundered there every year."

One of many concerns is that the criminals use sophisticated techniques to gather personal identification numbers (PIN), which they then use to tap consumers' bank accounts or to make purchases. In the case of these phantom withdrawals from consumers' accounts legal liability shifts from consumers to the card issuers. When a consumer allows his PIN to be stolen and misused, the consumer is liable. But when a criminal gang steals the ID, the card issuer that is liable.

Another frustration for the industry is that, even if the criminals are caught, European courts are not sufficiently aware of the total economic damage by their activities. Whereas a bank robber who steals a small sum may be sentenced to several years in prison, a credit card counterfeiter is typically given only a light sentence. Indeed, possession of a counterfeit credit card is not regarded as a crime in most instances. In summary, "there is low risk of detection for the criminals and light sentencing by the judiciary-criminals know how to take advantage of our weaknesses and they see the card business as a soft touch." An added advantage of the criminals is that they can easily move from one country to another. Given all of these factors benefiting the card criminals, it is small wonder that credit card fraud is a growing business in Europe.