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A fraud prevention firm projects card-not-present fraud will continue to fall this year.
The amount of card-not-present paymentcard fraud in the U.K. fell by an estimated 10% last year, according to Retail Decisions, a fraud prevention and payment processing firm.
The company estimates the value of the fraud that took place through online, mail order and telephone channels where a payment card is not directly swiped totaled 239 million pounds ($386 million), down from 266 million pounds ($430 million) in 2009. Such fraud in the U.K. fell 15% from 2008 to 2009, the company says, making 2010 the second year in row of reduced card fraud in direct sales channels.
The firm estimates such fraud will decline 5% in 2011, but says it expects fraud to rebound in 2012, when London hosts the Olympic Games.
“Just as the Beijing Olympics saw online fraud rocket in China we expect that London 2012 will have a similar impact,” says Carl Clump, CEO of Retail Decisions.
Retail Decisions says more retailers are taking action to protect themselves from fraud, such as screening transactions more closely, and says that caused the drop in card-not-present losses during the last two years. The firm says fraud attempts in the U.K. saw a fourfold increase from 2009 to 2010, although the company did not disclose a specific number of fraud attempts.
Clump advises merchants be vigilant about keeping ahead of fraud and emerging fraud methods.
“Retailers need a fraud prevention strategy that not just keeps pace, but is one step ahead,” he says. “To be truly effective, a system needs to be able to spot trends as they are emerging, not just identify them once they’re active.”