FICO On The Need-To-Knows Of Card-Not-Present Fraud
It’s common knowledge that card-not-present transactions, be they through online or mobile means, are on the rise. But businesses and consumers aren’t the only ones taking advantage of “swipeless” payment methods – fraudsters are too.
According to a recent survey done by FICO, a major credit score company, Internet, mail and telephone payment fraud increased at twice the rate of counterfeit fraud from January 2010 to September 2011. PYMNTS.com spoke with Doug Clare, vice president of product management for FICO, to discuss the company’s recent findings.
Care says one reason card-not-present fraud has increased is simply because the number of such transactions has grown – in other words, the sheer volume of card-not-present transactions has increased in such a way that more cases of fraud are inevitable.
As for why the rate of card-not-present fraud has grown so precipitously? Simple – it’s easier and safer for fraudsters.
“Card-not-present fraud is easier to pull off – it’s anonymous, relatively safe for the fraudster, and there’s less risk of exposer or being caught,” Clare says.
There’s no need to panic – Clare asserts that despite the rise, only about one percent of all debit and credit cards are affected by fraud. Still, he asserts that the best way for the payments industry to fight fraud is through data sharing and collaboration.
“It’s important for issuers, networks and merchants to expand collaboration, even though liability may be isolated,” he says.
To listen to more of Doug Clare’s interpretation of the findings, as well as steps consumers can take to protect themselves from fraud, listen to the full audio interview.
Vice President, FICO Fraud Solutions Product Management Team
Doug Clare is vice president for FICO’s fraud solutions product management team, focused on fraud prevention/detection software applications. Doug writes for the FICO Banking Analytics Blog here.
FICO delivers superior predictive analytics solutions that drive smarter decisions. The company’s groundbreaking use of mathematics to predict consumer behavior has transformed entire industries and revolutionized the way risk is managed and products are marketed. FICO’s innovative solutions include the FICO® Score — the standard measure of consumer credit risk in the United States — along with industry-leading solutions for managing credit accounts, identifying and minimizing the impact of fraud, and customizing consumer offers with pinpoint accuracy. Most of the world’s top banks, as well as leading insurers, retailers, pharmaceutical companies and government agencies, rely on FICO solutions to accelerate growth, control risk, boost profits and meet regulatory and competitive demands. FICO also helps millions of individuals manage their personal credit health through www.myFICO.com.
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