Criminals steal €1.5 billion from EU credit cards
EU citizens are losing some €1.5 billion every year as criminals siphon off their money through the fraudulent use of debit and credit cards.
A new report released on Monday (7 December) by the EU police agency Europol found that the thefts most often occur in the United States.
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“The majority of illegal face-to-face card transactions affecting the European Union take place overseas, mainly in the United States,” noted the Hague-based agency.
Embedded security features on EU cards such as chips and pin technology are easily bypassed in the United States.
Criminals exploit the weaknesses in America because some US-based cash machines are not fully compliant to a global security standard based on chip technology, known as EMV.
“Due to this phenomenon, and the lack of specific agreements on reimbursement of losses caused by less protected terminals, the majority of the loss burden caused by this fraud is on the EU card issuers,” said Europol.
The lax security feature on cash machines is not unique to the United States.
The agency found organised gangs also steal the money using the same techniques in the Dominican Republic, Columbia, Russia, Brazil and Mexico.
The risks involved are minimal since authorities are legally ill-equipped to deal with the cross-border nature of the crime. Those implicated in the EU are often given light sentences or bail since the bulk of the crime is committed outside its jurisdiction.
Other gangs overseas employ corrupt police officers and can afford the best legal services to derail criminal investigations.
“The ultimate solution to this problem would be to implement the EMV standard on a global level, including making United States’ merchants compliant,” noted the agency.
But costs to implement the standard on a global scale are exceptionally high and some banks still favour profits over what they deem as acceptable levels of fraud.
“Banking institutions are profit-making businesses, so reducing the illegal income of criminals is not always a priority for them when introducing new banking products or services,” said the agency.
Meanwhile, EU citizens are also victims of online credit card transaction fraud.
Online security features meant to bloc criminals from stealing personal details, credit card numbers and other sensitive information has since turned into a massively lucrative underground market.
Breaches and theft of such data is rarely reported by the industry in order to protect their reputation.
“In most of these cases the quantity of compromised card details is substantial, reaching hundreds of thousands or millions, enabling criminals to sell the bulk data on the internet,” said Europol.