Commission moves to combat electronic cash fraud

Date: 25/06/1998

By Chris Johnstone

INTERNAL Market Commissioner Nario Monti and his anti-fraud counterpart Anita Gradin are teaming up to combat growing levels of electronic payment and credit card fraud across the EU.

The world payment card industry reported a turnover of close to 2,000 billion ecu last year. At the same time, firms declared losses of 2.7 billion ecu as a result of card crime.

Monti and Gradin will call on member states to bring their divergent legal systems into line in proposals due to be approved by the European Commission next Wednesday (1 July). Officials say the legal overhaul is needed because much existing national legislation only recognises fraud and counterfeiting involving traditional cash and cheques.

Monti will present a report to the full Commission highlighting the wide scope for misuse of the latest generation of payment systems which is replacing cash.

“This communication will develop concepts and definitions of what is a criminal action,” said one payment systems expert.

He added that the Commission was deliberately targeting the whole gambit of payment systems, including chip credit cards, electronic purses such as the Clip and Proton cards popular in many member states, and transfers across electronic networks such as the Internet.

“We will open up the horizon very widely,” explained the expert. “If we were to say, for example, that crimes involving payment cards should be punished in the same way as for someone who falsifies banknotes, then criminals would turn to other methods such as electronic purses.”

Offences involving non-cash payment systems include using unauthorised 'PIN' numbers and manipulating bank computer systems and electronic bank transfers.