Despite a decline in the number of ATM card
fraud incidents in 2007 losses incurred by issuers increased
significantly, rising 43.6 percent compared with 2006 to €438.57
million ($670 million), reports industry body the European ATM
Security Team (EAST). By far the most prevalent form of ATM fraud,
the skimming of cards’ magnetic stripes, accounted for 4,501 out of
4,934 attacks, levels that represented declines of 1.5 percent and
15 percent, respectively.
fraud incidents in 2007 losses incurred by issuers increased
significantly, rising 43.6 percent compared with 2006 to €438.57
million ($670 million), reports industry body the European ATM
Security Team (EAST). By far the most prevalent form of ATM fraud,
the skimming of cards’ magnetic stripes, accounted for 4,501 out of
4,934 attacks, levels that represented declines of 1.5 percent and
15 percent, respectively.
Notably, skimming losses after – remaining
relatively stable between the first half of 2005 and the first half
of 2007 at €125.9 million and €123.4 million respectively – soared
to €315.14 million in the second half of 2007, almost 18 percent
more than total losses of €268 million in 2006. The average loss
per skimming attack in the second half of 2007 was €141.
relatively stable between the first half of 2005 and the first half
of 2007 at €125.9 million and €123.4 million respectively – soared
to €315.14 million in the second half of 2007, almost 18 percent
more than total losses of €268 million in 2006. The average loss
per skimming attack in the second half of 2007 was €141.
According to EAST director and co-ordinator
Lachlan Gunn, a key driver behind the increase in skimming losses
is fraud committed outside national borders by criminals using
stolen card details. In the second half of 2007 these fraud losses
totalled €279.64 million, up from €92.04 million in the first half
of the year and €198.92 in 2006 and €142.77 million in 2005.
Lachlan Gunn, a key driver behind the increase in skimming losses
is fraud committed outside national borders by criminals using
stolen card details. In the second half of 2007 these fraud losses
totalled €279.64 million, up from €92.04 million in the first half
of the year and €198.92 in 2006 and €142.77 million in 2005.
Gunn explained that these losses are occurring
globally in countries where all or part of the ATMs deployed are
not yet EMV (PIN and chip) compliant. While criminals cannot access
cardholder details housed in a card’s chip the magnetic stripe
remains highly vulnerable to duplication.
globally in countries where all or part of the ATMs deployed are
not yet EMV (PIN and chip) compliant. While criminals cannot access
cardholder details housed in a card’s chip the magnetic stripe
remains highly vulnerable to duplication.
Gunn continued that domestic fraud losses
declined in 2007, from €93.15 million to €56.2 million, indicating
that the deployment of EMV compliant ATMs is an effective means of
combating ATM skimming fraud.
declined in 2007, from €93.15 million to €56.2 million, indicating
that the deployment of EMV compliant ATMs is an effective means of
combating ATM skimming fraud.
However, even in countries where ATMs are EMV
compliant skimming of magnetic stripes continues and he believes
international losses will remain a problem for the industry until
the vast majority of the world’s ATMs become EMV compliant and do
not allow a magnetic stripe option.
compliant skimming of magnetic stripes continues and he believes
international losses will remain a problem for the industry until
the vast majority of the world’s ATMs become EMV compliant and do
not allow a magnetic stripe option.
EAST’s analysis was based on data supplied by
20 European countries with a total of 336,886 ATMs in
service.
20 European countries with a total of 336,886 ATMs in
service.
Of this total Gunn said 78 percent were EMV
compliant. Levels of EMV compliance however, vary widely and only
12 countries had achieved 100 percent compliance by the end of
2007: the UK, Switzerland, Sweden, Portugal, Netherlands, Malta,
Luxembourg, Lichtenstein, Ireland, France, Finland and
Denmark.
compliant. Levels of EMV compliance however, vary widely and only
12 countries had achieved 100 percent compliance by the end of
2007: the UK, Switzerland, Sweden, Portugal, Netherlands, Malta,
Luxembourg, Lichtenstein, Ireland, France, Finland and
Denmark.
The lowest levels of compliance are 7 percent
in Lithuania, 17.5 percent in Romania and 23.7 percent in Poland.
Surprisingly, countries such as Germany and Belgium at 60 percent
compliance also have a long way to go.
in Lithuania, 17.5 percent in Romania and 23.7 percent in Poland.
Surprisingly, countries such as Germany and Belgium at 60 percent
compliance also have a long way to go.
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