March 04 2008

Preventing prepaid card fraud

Chip and pin has stumped high-street card fraudsters, so they’re turning to alternative ways to transfer funds from stolen cards.

Chip and pin has done a lot to reduce the amount of card fraud in the UK however where there’s an ill will there’s a way and fraudsters are moving to different forms of fraud.

192.com Business Services, the identity check provider has seen a 500% rise in the volume of ID checks being run by prepaid operators to prevent fraudsters creating prepaid accounts with false and stolen identities.

In the UK card fraud amounts to £428 million according to the latest card fraud research from APACS. Card schemes and the ecommerce communities have fought back against the fraudster by employing fraud prevention technologies such as ID checks and IP address validation technology. However, Fraudsters are always on the look-out for new tools to help them commit card not present (CNP) fraud and the opportunity to load funds onto prepaid cards with stolen and cloned credit cards extends the “window of fraud opportunity”.

The ID check service for prepaid operators called 192 Prepaid-ID verifies customer name, address, date of birth and home telephone number. The checks happen in real-time when customers create their prepaid account – but in the background, so a prospective customer never knows they’re taking place.

“With criminals using a number of techniques to commit card fraud, we feel it is important to always be one step ahead and to protect our customers in the best possible way. 192 Prepaid-ID is helping us to do just that,” said Edward Platt, at EasyKard.

“Fraudsters are an entrepreneurial and opportunistic breed,” said David Pope, director at 192.com Business Services. “If they see a new tool available to them in their pursuit of card fraud they will seize that opportunity. ID verification at the point of prepaid card account creation adds that crucial layer of security so that prepaid operators can prevent prepaid accounts being opened with false or stolen identities. A fraudster would then have to be pretty stupid to open an account in their own name and load a prepaid account with funds from a stolen or cloned credit card.”

by Marcus Austin (Web Editor)