Fraudsters are increasingly turning to telephones and the internet since the introduction of Chip and PIN technology, according to new research. Data from the UK payments association Association for Payment Clearing Services (Apacs) shows that card-not-present fraud is on the increase since the launch of Chip and PIN, rising by 21% last year to £183.2m from £150.8m in 2004. These transactions are taking place over the internet, by telephone and via mail order purchases, and Apacs’ research suggests that with the introduction of Chip and PIN, stolen cards are harder to use, but card-not-present scams are now easier targets for fraudsters because many online retailers fail to take adequate precautions. “Online retailers need to implement tighter security policies to prevent the increase of card-not-present fraud or the general public will lose faith in purchasing over the internet,” said Roy Hills, technical director at security testing firm NTA Monitor. “It's just a question of companies taking some easy precautions and having a clear security policy which is adhered to, but many online retailers are still leaving themselves and their customers exposed.” Hills suggested that online sellers can protect themselves by asking customers to provide a billing address as part of the transaction and only delivering goods to a billing address.
Retailers can also ask for the Card Security Code, or the three digits printed on the back of most credit and debit cards, he said.