Bolkestein steps up war on credit card fraud

Date: 01/02/01

By Peter Chapman

European Commission financial services chief Frits Bolkestein is set to unveil an action plan to step up the fight against organised credit card fraud.

His proposals will call for greater cooperation between industry and national watchdogs in a bid to identify fraud before it happens.

"Fraud is a criminal offence in all member states," said a Commission insider. "The problem is actually catching people."

Bolkestein wants to help coordinate the anti-fraud efforts of authorities and financial institutions across borders - and will also call for credit card companies and banks to to deploy technology that makes it impossible for the criminals to hack into users' accounts.

"We basically put forward a slew of suggestions that will encourage exchange of information between police authorities and stakeholders. It will run, roughly, for three years. At the end of that time we will look again and see what we should do further," the official said, noting that by then new anti-fraud technology may have rendered the initiative redundant.

Officials say this fraud effort is entirely separate from moves by Bolkestein to boost consumers' rights to reimbursement if they fall victim to fraudsters, set to figure in a separate paper on e-commerce and financial services expected early next month.

"The whole idea with this initiative is to stop fraud happening in the first place," said one.

Frederick De Brouwer, legal advisor to the European Banking Federation, says the industry welcomes Bolkestein's proposal, including the decision to avoid binding legislation on the issue.

"It is no secret that fraud exists and is increasing," he said. "But over-regulation is not the solution because the crooks will always be able to circumvent the law. What is important is to find ways to put in place systems or data bases that will not infringe data privacy laws to enable banks and credit card companies to track criminals," he added.

Bolkestein believes that action to tackle credit card fraud will help boost confidence in an area still dogged by consumer mistrust. This lack of confidence, the Commissioner believes, is also one of the factors hampering the EU's fledgling market for electronic commerce.

European Commission financial services chief Frits Bolkestein is set to unveil an action plan to step up the fight against organised credit card fraud.