1. KEY JUDGMENTS
- The criminal market of payment card fraud (PCF) within the European Union (EU) is dominated by well structured and globally active organised crime groups (OCGs). Criminal networks have managed to affect non-cash payments in the EU to the extent that protection measures are very expensive and need to be implemented on a global level. Consequently, the use of payment cards can be inconvenient and no longer fully secure for EU cardholders.
- Payment card fraud is a low risk and highly profitable criminal activity which brings organised crime groups originating from the EU a yearly income of around 1.5 billion euros. These criminal assets can be invested in further developing criminal techniques or can be used to finance other criminal activities or start legal businesses.
- The EU is increasingly exposed to the threat of illegal transactions undertaken overseas and should develop more efficient solutions to help law enforcement authorities (LEAs) combat the fraud. Europol, gathering intelligence on fraudulent overseas transactions affecting the EU, as requested by competent authorities of Member States (MS), is not entitled to cooperate with non-EU police forces or request specific measures to help combat and prevent fraud against the EU. A special mandate for Europol is recommended to dismantle globally-active OCGs and protect the EU against further fraud committed through non-cash means of payment.
- The majority of illegal face-to-face card transactions (skimming-related) affecting the European Union take place overseas, mainly in the United States. The EU should take urgent measures to promote the EMV standard as a global solution against the counterfeiting of payment cards. As full EMV implementation will take time, a temporary solution could be applied, namely the implementation of GeoBlocking – blocking overseas transactions using EU-issued cards unless they have been activated in advance.
- Common European legal solutions for the security of on-line retail payments (internet, mobile), as well as the mandatory reporting of financial data breaches, should be considered to prevent fraud affecting EU citizens. Prevention and combating card-not-present (CNP) fraud requires specific regulations on the customer’s identification (3D secure protocol) and security of the on-line payment environment. The role of the European Central Bank and Europol is crucial to present the problems and propose specific solutions.
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