A report issued today by the European Commission (EC) has pledged to do more to combat the growing problem of electronic payment fraud.
Despite recent European Union (EU) legislation around anti-money laundering and the introduction of the Single Euro Payments Area (Sepa), it said payment fraud had continued to migrate online, where transactions are carried out without the person or method of payment needing to be present.
The EC report on fraud and measure taken to combat it between 2004 and 2007 said that although the number of fraudulent payments made was small, when compared to the volumes of legitimate transactions made across the Euro-zone, their affect was to undermine confidence among EU citizens in buying and selling online.
The report said: Payment fraud is a moving target and, inevitably, new threats appear, such as identity theft/fraud and, more generally, cybercrime.
It also said that, during its investigations into the issue, a seminar held at the end of last year concluded that awareness and education of the user may be more important than technology. Although it said the technology, like those designed to enhance privacy, in most cases the problems are due to human factors.
While security should ideally not be an option, in practice it is, and it is difficult to oblige people to use more security, it added. The Commission said it was also preparing a communication on information infrastructure protection.
In tandem with its enforcement of simplified payment processing through Sepa and the know your customer component of its anti-money laundering legislation, the EC said it planned general EU public awareness campaigns, which could take the form of events and conferences to highlight the dangers of electronic payments.
In the UK online credit card fraud, often characterised by situations where the card was not present,
rose 133 per cent between 2001 and 2006, according to the UK payment industry body, APACS.
