Is France Too Laissez Faire About Fraud?

France was the founder of the chip & PIN security scheme in Europe, but it seems they have taken a rather laissez faire approach since then, as a recent fraud report revealed that France has finished in first place for highest losses from card fraud in Europe.

For the past few years, the UK remained the reigning country with the most fraud losses, but according to a new FICO report France came in first this year with 29 percent in losses. Granted, the British weren’t far behind with a reported 27 percent in losses, but a little improvement is better than none.

UK financial authorities have been working to reduce card fraud, and have been implementing advanced systems in fraud technology. The improvements in fraud loss suggest that the UK’s tightened system is helping.

Martin Warwick, FICO’s fraud chief in Europe, said, “Despite a rise of 14 percent last year, UK fraud losses were still 36 percent lower in 2012 than at their peak in 2008. By contrast, France’s overall fraud losses grew 65 percent between 2007 and 2012, which translated to an additional €174 million of card fraud losses over the period.”

He also said France reported to have the highest lost-and-stolen card fraud level in Europe.

As a whole, Europe reported to have a 6 percent increase in card losses since 2011. Russia, France and the UK represented a whopping 80 percent of the increase. Moreover, France alone was accountable for almost half of the increased number. C’est dommage.

Warwick went on to further explain the fraud patterns across Europe.

He stated, “Clamping down on fraud can help banks minimize losses but can also result in a more frustrating customer experience, as shoppers’ cards may be blocked unnecessarily. When the negative impact on customers outweigh the benefits of tighter fraud prevention methods, banks relax their controls, inevitably leading to another rise in fraud.”

FICO’s report included a European Fraud Map that illustrates the 21 countries suffering from card fraud and the total losses. The map listed frequent card fraud scenarios, which included counterfeit fraud, stolen cards, and online fraud and ID theft.

“Fraud is like a balloon—if you squeeze it out of one scheme, or one country, it bulges somewhere else,” Warwick said.

To read the full report at Fico click here, and to view the European Fraud Map click here.