FICO Map Reveals Winners and Losers in Fight Against European Card Fraud

LONDON—May 9, 2012—FICO (NYSE:FICO), the leading provider of analytics and decision management technology, today published an interactive “fraud map” of Europe that shows how technology has changed the card fraud landscape. The map — accessible at www.fico.com/fraudeurope — reveals that card fraud has migrated from the UK to other countries, notably France and Germany, over the last few years, due to the UK’s adoption of chip and PIN technology, and issuers’ use of analytics-based fraud management systems.

"Payment card fraud in Europe increased after 2006, peaking in 2008," said Martin Warwick, principal consultant and fraud chief for FICO in EMEA. "However, 2011 levels are still high, at €121 million more than in 2006. A notable exception is the UK, which accounted for 45 percent of the total in 2006 and now accounts for 29 percent, a reduction of €177 million. Criminals have shifted their focus to new opportunities within Europe, as anti-fraud measures in the UK become stricter."

Based on data provided by Euromonitor International, the fraud map shows fraud amounts from 2006-2011 for 21 countries, across five categories, including counterfeit fraud, card stolen and ID theft. Country-specific drill-downs show how fraud has evolved, and indicate new risks in areas such as ID theft, counterfeit cards and online fraud. Cross-region trends include the increase in card-not-present (CNP) fraud online.

"The rise of chip and PIN protection has spurred migration to CNP fraud, where criminals make use of internet channels that carry less risk than attempting fraudulent purchase in a shop," said Warwick. "Response to the CNP threat has been slower but increased adoption of the 3D Secure protocol - which is used in Verified by Visa and SecureCode by MasterCard for online transactions, and which American Express is now joining - should make a difference."

FICO’s fraud solutions help banks manage their enterprise fraud challenges. FICO^® Falcon^® Fraud Manager is the world’s leading card fraud management solution, and protects more than 2 billion payment cards worldwide. Last week, FICO announced its latest offering, the FICO^® Merchant Monitoring Solution, which helps merchant acquirers avoid losses from merchants in the form of card fraud and identity theft, and identifies the possibility of financial compliance failures.

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FICO (NYSE:FICO), formerly known as Fair Isaac, delivers superior predictive analytics solutions that drive smarter decisions. The company's groundbreaking use of mathematics to predict consumer behavior has transformed entire industries and revolutionized the way risk is managed and products are marketed. FICO's innovative solutions include the industry-leading solutions for measuring credit risk, managing credit accounts, identifying and minimizing the impact of fraud, and customizing consumer offers with pinpoint accuracy. Most of the world's top banks, as well as leading insurers, retailers, pharmaceutical companies and government agencies, rely on FICO solutions to accelerate growth, control risk, boost profits and meet regulatory and competitive demands.

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