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 Three key changes in Europe will change the fraud landscape significantly over the next few years:
Chip and Pin – The impact on the fraud landscape of Chip and Pin on the UK was to change the fraudsters’ approach. They moved from using stolen or cloned cards in a UK card present environment, to either using cards in a card not present environment, primarily the Internet, or using stolen or cloned cards outside of the UK in areas where the chip and pin system is not yet implemented. In addition, the practice of stealing identities and using these to apply for a card with a pin number increased. As Chip and Pin is rolled out across Europe, we would expect to see similar displacements of fraud approach occur.
The Internet - Fraudsters have a new playground. The largely un-policed Internet, with its new global services and platforms such as FaceBook, MySpace, Second Life and ebay, offer a fantastic opportunity.
European citizens - Increased migration of citizens around Europe will present two challenges. Firstly, with no central ID management service, how do you verify that a new to country citizen, and their financial standing, is bona fide? Secondly, fraudsters are enterprising and will export and exchange techniques and information more readily than law enforcement.
"Keeping one step ahead of the fraudster is an ongoing challenge and one that requires constant evolution."
These changes will cause fraudsters to focus on the theft and illegal use of the identities of genuine innocent citizens. They will use these stolen identities to acquire services with no intent to pay.
Experian is ensuring that services organisations can protect themselves from this threat by offering two important services through its global Decision Analytics division:
Authentication – new Universal ID check will allow organisations to first assess if person wishing to take services actually exists, and then determine if the person presenting themselves is the person they say they are. This is accomplished by cross checking the data provided by the person against a number of data sources and providing a scored assessment of their authenticity. Over 20 European countries will be supported from June 2008.
Application fraud detection -Going beyond our authentication services, the Hunter fraud solution looks for anomalies in the data provided on an application for services, both against previous applications for services and additional data sources.  It also checks for use of known fraudulent data such as names, addresses, phone numbers and e-mail addresses.
Keeping one step ahead of the fraudster is an ongoing challenge and one that requires constant evolution. The knowledge of fraud types and methodologies, and deep understanding of local market conditions are crucial for the implementation of effective fraud prevention strategies.
Nick Mothershaw
Strategy and Consulting Director – Fraud & Identity Solutions
Decision Analytics
Experian
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