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The growing global popularity of prepaid cards presents ample opportunities for fraudsters and likely will lead to the next wave of card fraud, Mike Urban, senior director of fraud solutions at FICO, tells CardLine Global. FICO is a credit-scoring system created by United States-based Fair Isaac Corp. The fraud will take the form of counterfeit cards, lost-and-stolen cards and theft of PINs, and it will hit set-value and reloadable cards, he says. Meanwhile, the year-to-year growth rate of card-not-present fraud likely will begin to decline, even as the total amount of card-not-present transactions grows as more cardholders make purchases online, he says. Card-not-present fraud has increased as more countries, including the United Kingdom, issue chip-and-PIN cards that protect consumers at the point-of-sale but whose magnetic stripe data remain vulnerable to criminals. Card-not-present fraud committed with credit and debit cards issued in the UK increased 13% in 2008, to 328.4 million UK pounds (US$530 million or 380.3 million euros) from 290.5 million pounds in 2007, according to the UK Cards Association, an issuer-backed group previously known as APACS. Additionally, losses for card-not-present fraud in Australia hit AU$63.5 million (US$50.4 million or 36.2 million euros) for the 12 months ended 30 June, up 58.8% from AU$40 million for the previous 12 months, according to the most recent figures from the Australian Payments Clearing Association.
