Talks delay credit card fraud report

Date: 04/09/1997

By Simon Coss

A LONG-AWAITED European Commission report into the multi-million-ecu problem of credit card fraud is now unlikely to appear before next year.

The Commission first suggested researching the issue in January this year. The idea was to compile a document as the basis of a formal legislative proposal to tackle a problem which costs member states an estimated 224 million ecu a year.

But officials in the institution's justice and home affairs task force admit that a particularly heavy workload, coupled with the need for detailed discussions with the credit card industry, are causing delays.

They stress however that some progress has already been made, pointing to a report on international fraud compiled for the institution by a renowned consultancy firm earlier this year. But that document, entitled Fraud Without Frontiers, is a fairly general survey which touches only briefly on the credit card issue.

Surprisingly, the credit card industry itself does not seem unduly perturbed at the Commission's sluggish progress.

Pascale Brian of Europay, the EU's largest card supplier which provides credit and payment cards for more than 100 million European nationals, says the industry now feels it has the support of member governments in its quest to bring in tougher penalties for fraudsters. She argues that what matters in the long run is drafting the most appropriate rules rather than rushing through ill-conceived legislation.

“We feel that both the Commission and the Council [of Ministers] are behind us 100&percent;. Ministers now seem very enthusiastic to do something about this problem. I am optimistic and I was not a year ago,” she added.

Europay will meet Commission officials this month to discuss how to proceed with drafting the report and says it hopes to see some real progress made on the issue during the first half of 1998.

Critics argue that laws to tackle credit card fraud are currently quite weak in many EU member states. “The legislation which deals with counterfeiters of banknotes is much stronger than with other payment systems, for example,” said one.

A lack of systematic police cooperation between national governments to counter what is essentially an international crime also causes serious problems. National approaches vary greatly and it is often hard to pursue criminals across borders.

If the EU is to make any real progress in cracking down on the fraudsters, ministers will not only have to agree amongst themselves on a coordinated response but will also have to draw up agreements with third countries.