With US Fraud, It Takes a Bust to Bring Awareness0
Recent Nilson Report fraud numbers show that the United States accounts for 47 percent of global fraud, even though it generates only 27 percent of the total volume of purchase transactions.
Alarming, right? Still, I haven’t seen very much media coverage of this news.
What has generated a lot of coverage recently is the “Biggest ID Theft Bust in History,” where 111 people were brought down in an identity theft scheme that cost the US more than $13 million over a 16-month period.
The focus of the crime, dubbed “Operation Swiper,” was credit card fraud, targeting the United States because of our weak magnetic stripe card technology. The scam is simple: retrieve credit card numbers through the use of skimming, as we’ve previously written about, and then place the numbers on a magnetic stripe credit card and voila, the criminals can spend other people’s money anywhere they want.
With this news, finally it seems that everyone is realizing that fraud and magnetic stripe technology are a huge problem for the United States, and that criminals are very organized about exploiting it.
Queens District Attorney Richard A. Brown pointed to the credit card companies, telling the New York Times that they were “putting too much money into marketing and not enough into security.” John Buzzard, FICO’s Card Alert Service, told BankInfoSecurity that the US is a “criminal’s playground right now,” but added that “The move to chip cards will make an enormous difference in the way our industry manages risk, with the ultimate goal being a significant reduction [in fraud].”
Deputy Inspector Gregory T. Antonsen, the commander of the New York Police Department’s Identity Theft Squad, told Consumer Reports, “We’ve recommended to several of the large financial institutions that the biggest deterrent to skimming would be using the kind of cards that are issued in Europe and Canada with a chip that makes them pretty much impossible to skim, but so far they seem unwilling to do that.”
While I applaud the hard work it took to bring these criminals to justice, it is something of a shame that it takes a big bust like this to shed light on growing fraud problem in the United States. The numbers are sitting right in front of us. Though Visa is on board with EMV chip technology, hopefully this newest identity theft bust will help all US card issuers to fully embrace it, too.