Stalemate in the Battle to Protect Against Internet Credit Card Fraud
Posted by Peter Mucklestone and Stuart Louie
High ranking security experts at both Visa USA Inc. and MasterCard International Inc., two of the world's largest credit-card associations, have suggested that the struggle to protect against the fraudulent use of credit card and accountholder information has reached a stalemate, and those tasked with enforcement are in danger of losing ground. According to recent data compiled by the F.B.I., in 2004, the incidents of internet-related credit card crimes increased by sixty-six percent (66%) and the average reported loss associated with each such incident tripled to $2,400.00.
The increase in both the number of incidents and the average reported loss can, in part, be attributable to the increase in consumer internet transactions. However, security experts also note that internet thieves have become more sophisticated in their methodsて綷ften operating in organized crime rings and even, in certain cases, employing former KGB cryptographers. Furthermore, merchants, third-party processors and credit card companies have been slow to fully implement their security procedures. John Shaughnessy, senior vice president for fraud prevention at Visa USA Inc., confirmed that a significant proportion of incidents where a consumer's account or personal information had been breached by computer hackers could have been prevented had security policies within the chain of payment been properly followed.
In short, both credit card associations believe that the industry will need to spend millions, if not hundreds of millions of dollars over the next decade just to keep pace with internet identity criminals. Though Visa USA Inc. and MasterCard International Inc. are continuing to explore ways to keep consumer credit card information secure (and even exploring ways to render stolen credit card information useless to criminals), neither credit card association is optimistic that a secured system that could eliminate the threat of identity theft and internet credit card fraud will be developed in the near future.
The authentication and verification methods used online need to be more complex than they are at present.
Research on how to map webcam technology to link to recognition databases must be looked into. The benefit of this is that it will ensure the person using the card is who has been registered on the database.