Epidemic of cyber-attacks largely to blame; FICO European Fraud map shows trends across 19 countries
- UK fraud losses were up 19% in 2018 compared to 2017
- Total fraud losses in Europe increased for the first time since 2015 across 19 countries studied
- Card-not-present (CNP) and social engineering fraud continued to rise, and drove losses in the vast majority of countries
- Despite UK banks preventing more fraud than ever in 2018, the increase in volume of attempted fraud meant losses outstripped gains
Analytics software firm FICO has released its annual interactive European Fraud Map, which shows that the UK’s card fraud losses hit a record £671 million in 2018. The data from Euromonitor International and UK Finance compares these losses against previous years and 18 other European countries.
More information: https://www.fico.com/europeanfraud/
The UK’s card fraud losses were the biggest in Europe, and account for nearly half of the €1,616 million (approximately £1,400 million) lost to fraud across the 19 countries in the map. This development comes just a year after the UK managed to cut fraud losses by 8%.
“The threat of fraud in the UK has been persistent and growing extensively over the past seven years,” said Matt Cox, vice president for fraud management solutions in Europe at FICO. “The sheer volume of attempted fraud has meant that, although more fraud is being prevented now than ever before, and that it’s being caught earlier in the attack cycle, the total value lost is still on the rise.”
Data Breaches to Blame
The primary cause of these record-breaking losses is an epidemic of high-profile data breaches.
“Personal information lost in high-profile data breaches means it’s easier than ever for criminals to impersonate individuals and businesses, so we all need to be more vigilant – personally, and as an industry,” said Cox. “We’re seeing the continued growth and diversification of social engineering fraud, which uses techniques like vishing, phishing and whaling”
Money laundering via mule accounts also remains a challenge for banks. With the proliferation of real-time payments – made possible by Faster Payments in the UK and SEPA CT Inst across Europe – criminals can move and retrieve their ill-gotten gains between accounts and across borders near instantly. This makes fraud harder to follow, catch and remediate once it’s taken place.
How to Fight Back
“The key to fighting online fraud lies in establishing practices to protect against data compromise,” said Cox. “Drawing on global networks of loss data and confirmed cases of fraud enables businesses to identify and prevent data breaches significantly earlier, reducing the customer losses and operational pressures that often result from these attacks.”
FICO® Card Compromise Manager offers real-time visibility into emerging and confirmed threats, identifies organized use of stolen data, and suggests the best course of action to mitigate losses. Card Compromise Manager uses the data held in the Falcon Intelligence Network – a consortium of over 9,000 financial institutions committed to global threat intelligence sharing and collaboration.
FICO continues to be the leading innovator in the global fight against fraud, and has built the FICO® Falcon® Platform with a multi-layered, real-time approach in mind: the key to an effective anti-fraud strategy. Last year, research firm Chartis named FICO a category leader in enterprise fraud in its Financial Crime Risk Management Systems: Enterprise Fraud; Market Update 2018 report.
Source: FICO News Release