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November 17, 2014

FICO Data Shows Anti-Fraud Technology Keeping UK Card Fraud Losses at Bay

November 17, 2014

CNP fraud accounts for 74 percent of UK fraud losses

LONDON—November 17, 2014—FICO (NYSE:FICO), the leading provider of analytics and decision management technology, today announced that card-not-present (CNP) fraud accounted for three-quarters of card fraud cases and fraud losses in the UK from 2012-2014, based on the payment cards in the FICO® Falcon® Fraud Consortium for Europe. Despite the dominance of CNP fraud, UK issuers have used anti-fraud technology to keep loss rates below their 2008 level.

CNP fraud targets transactions made online or over the phone, where chip and PIN technology can't be applied. Although losses to CNP fraud saw an overall increase in the two-year period ending in mid-2014, so did the number of card transactions, leaving the overall risk posed by CNP fraud the same as in previous years. Other types of fraud, including cross-border fraud, also remained consistent with previous years.

E-commerce spending in the UK more than doubled from £41 billion in 2008 to £91 billion in 2013, according to the UK Cards Association. However, CNP fraud losses fell in the same period, from £328 million to £301 million, according to industry data published in FICO’s 2013 European Card Fraud Map.

"If CNP fraud had kept pace with online spending since 2008, we would have seen 2013 CNP fraud losses of £728 million - 122 percent higher than they actually were," said Martin Warwick, FICO's fraud chief in Europe, Middle East and Africa . "This demonstrates the success UK issuers have had controlling fraud with both chip and PIN technology and the advanced analytics in FICO Falcon Fraud Manager. Criminals have not been able to achieve a sustainable advantage over the counter-fraud technologies.

"Nevertheless, criminals can be very clever as they seek ways to exploit weaknesses in payment systems," Warwick said. "It's important - for the sake of consumers, merchants and banks - to employ the most advanced and dynamic anti-fraud technologies to thwart them. It's also important that cardholders remain vigilant and regularly check their statements to monitor spending on their cards and identify any potentially fraudulent transactions. We are working with banks and issuers to help them gain an even better understanding of individuals' specific e-commerce behavior, so that our models detect more fraud with a minimum of false positives."

The latest data from the Consortium also shows that travel-related merchants — from hotels to travel agencies — are the most likely places for fraudulent transactions.

"Most Europeans are aware of the importance of taking precautions when using an ATM, and of being vigilant when spending abroad," says Warwick. "This latest data reinforces the need for cardholders to take care, and for card issuers to adopt the latest technology for identifying suspicious activity as early as possible."

MCC

Description

Percentage of total card fraud

7011

Hotels, Motels, and Resorts

6,02 %

4722

Travel Agencies, Tour Operators

5,86 %

6011

ATMs

4,34 %

5411

Grocery Stores, Supermarkets

4,31 %

5732

Electronics Stores

3,44 %

5311

Department Stores

2,51 %

5812

Eating Places, Restaurants

2,09 %

4511

Airlines, Air Carriers

1,99 %

5691

Men’s and Women’s Clothing Stores

1,79 %

6300

Insurance Sales, Underwriting, and Premiums

1,75 %

Source: FICO® Falcon® Fraud Consortium for Europe
FICO’s data comes from card issuers in Germany, the UK, Ireland, the Netherlands, Poland and Switzerland. FICO analyzed this data to develop the latest UK / Ireland and European models for FICO® Falcon® Fraud Manager, which are available now to Falcon clients in Europe.

Über FICO
FICO (NYSE: FICO) ist ein führender Anbieter von Predictive Analytics und Softwarelösungen für Entscheidungsmanagement, das Unternehmen in über 90 Ländern dabei unterstützt, bessere Entscheidungen zu treffen, um Wachstum, Profitabilität und Kundenzufriedenheit zu steigern. Der zukunftsweisende Einsatz von Big Data und mathematischen Algorithmen zur Erstellung von Prognosen zum Kundenverhalten hat ganze Branchen grundlegend gewandelt. Die Analytics-Softwarelösungen und -Tools von FICO werden in den verschiedensten Branchen verwendet, um Risiken und Betrugsfälle zu verringern, profitablere Kundenbeziehungen aufzubauen, Abläufe zu optimieren und strenge regulatorische Vorgaben zu erfüllen. Many of our products reach industry-wide adoption. These include the FICO® Score, the standard measure of consumer credit risk in the United States. FICO-Lösungen integrieren Open-Source-Standards und Cloud Computing, um so maximale Flexibilität und schnelle Bereitstellung zu ermöglichen und Kosten zu reduzieren. Das Unternehmen hilft Millionen von Menschen dabei, ihren persönlichen Kreditstatus zu verwalten.

FICO: Make every decision count™. Learn more at www.fico.com.

FICO, Falcon and “Make every decision count” are trademarks of Fair Isaac Corporation in the United States and other countries.

Newsroom-Kontakte

Greg Jawski
Amerika

greg.jawski@porternovelli.com
+1 212-601-8248

Darcy Sullivan
Europa, Naher Osten und Afrika

dsullivan@fico.com
+44 (0) 209-940-8719

Saxon Shirley
Asien-Pazifik

saxonshirley@fico.com
+65 6422-7795

Marisa Arribas
Lateinamerika

marisaarribas@fico.com
+1 786 482 7231

Camila Placa
Brasilien

camilaplaca@fico.com
+55 11 5189-8258