European Card Fraud - Germany

Germany Maintains Control over both Losses and Basis Points

Like France, Germany remains steady on card fraud losses, maintaining a slow increase which is to be expected in line with growing payments. Losses now sit at €123M, with an average increase over the last 10 years of around 2%. Germany’s basic points are far lower though, at 1.25, showing that the increase is well proportioned to the increase in consumer spending. While Strong Customer Authentication methods are proving effective in Germany and across Europe, this is driving fraudsters to target social engineering, as well as non-secure channels.

Interestingly, the last 3 years have seen both Card Lost or Stolen in the Post and Counterfeit Cards emerge as threats, with small loss values but a noticeable rise. Card Lost or Stolen in the Post is up to €0.3M, which is small but we would expect the direction of losses to keep decreasing. Cards being stolen in the post are commonly intercepted in communal post areas or by directly intercepting mail services. Counterfeit Card fraud losses are up to €0.2M. It’s possible that fraudsters have gone back to this older fraud trend in response to tightening card fraud measures brought in by PSD2 and strengthened over the last 10 or so years. Losses are low though, so it’s expected that neither fraud type will become a problem again. 

Germany’s regulatory body BaFin has taken significant strides over the last few years to crack down on fraud networks and has released guidance on tackling major fraud trends such as phishing, quishing, and ID fraud. It is also urging organisations to tighten fraud controls, targeting authentication steps, real-time intervention, and the full customer 360 view. Banks in Germany should focus on ensuring they have a unified platform to be at the forefront of fraud prevention and remain ahead of a rapidly growing fraud technology threat.