Plastic card fraud: a matter of intelligence

Publication Date01 Jan 1995
DOIhttps://doi.org/10.1108/eb025654
Pages300-335
AuthorDerek J. Oliver
SubjectAccounting & finance
Journal
of
Financial Crime Volume
2
Number
4
Plastic card
fraud:
a matter of intelligence
Derek
J.
Oliver
Received: 14th November, 1995
Derek Oliver is Principal EDP Auditor in the UK
Audit Office of the First Data Corporation of
Omaha, Nebraska. He is based at the UK site of
First Data Resources
(FDR),
the world's largest
third-party processor of credit and debit card
transactions. Derek is a Certified Information
Systems Auditor (CISA) and a Certified Fraud
Examiner (CFE) and is Examination Coordinator
for the London Chapter of the Information
Systems Audit and Control Association
(ISACA).
ABSTRACT
This paper considers plastic fraud
and,
in
par-
ticular, the fraudulent production of imita-
tions and 'white'
plastics.
Countermeasures
include
the
controls
of
card issuers
and proces-
sors,
computer
software,
and
intelligence
shar-
ing
and gathering.
The author
concludes
the paper with an
assessment
of the
success
of
countermeasures
and the need for Government and
the
judi-
ciary to grasp the
seriousness
of the threat
posed
by
plastic
card
fraud.
PLASTIC CARD FRAUD
Plastics fraud (credit and debit cards are
generically referred to as 'plastics') is big
business involving international crimi-
nals.
Gone are the days when the biggest
losses from the fraudulent use of plastics
originated from theft whilst in the post:
that was simply addressed by registered
mail, by sending new cards to bank
branches for collection and by improved
security procedures within the Post
Office. No longer is there concern about
the 'odd' card being stolen or fraudu-
lently used when lost; the day of the
fraudulent retailer, processing several
transactions against the same card once
the details have 'legally' been obtained
following a purchase, are numbered.
The increase in electronic authorisa-
tions,
the spread of Electronic Funds
Transfer (EFT-POS) systems and tight
controls in the processing of multiple
transactions have reduced these once
profitable activities to a minimum.
Already appearing on the streets are
plastics bearing computer-etched photo-
graphs of the authorised cardholder; new
systems for producing these will soon
have the cost and efficiency down to a
level where the inclusion of a first-class
facsimile of the cardholder will become
the standard on every plastic card.
There is also a greater, and still
improving awareness of the need for
vigilance amongst the general public,
particularly at the merchants, retailers,
restaurants etc where the plastics are
accepted, the 'front line'. Merchants are
now more inclined to seek authorisation
for transactions, ie to confirm by refer-
ence to the card issuer or their agent that
the card and the cardholder are genuine
and the sale is acceptable in every way,
and, more to the point, the cardholders
are more tolerant of the need and are
prepared to wait whilst authorisation is
sought; after all, minimising plastic fraud
is in the interests of every legitimate card
user and this is now generally accepted.
Page
300

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