In 2011, 79% of financial fraud victims fell prey to opportunistic criminals (according to Verizon’s 2012 Data Breach Investigations Report). With the cashless Olympics set to act as a world stage to showcase the possibilities of contactless payments and millions of people expected to flock to London during the Games, fraudsters will be well placed to take advantage of unsuspecting visitors.
The Olympics has been tipped as ‘the first social media Olympics’ – a reflection of the number of visitors who will be armed with smartphones and tablets to share photos, check in at key destinations, and update friends and followers. With several million extra people in London, it is no secret that wireless networks will be under significant strain.
To support this demand, the number of Wi-Fi spots across the capital has been dramatically increased for the Games. BT has provided 500,000 Wi-Fi hotspots around, including 1,000 hotspots in the Olympic park, and Virgin Media has installed internet access into the London Underground network with 80 Tube stations online in time for the Games.
Wireless technology is increasingly becoming the norm, and a recent investigation by Channel 4 proved that Near Field Communication (NFC) technology can be adapted to collect sensitive data from cards with just the swipe of a phone.
Another common concern with NFC technology is the concept of eavesdropping – when a third party intercepts the signal sent between two devices. If that third party were to intercept a data transmission between a smartphone and a credit card reader, they could have access to that person’s credit card information.
Furthermore, retailers with connected systems and networks also risk cyber attacks – once fraudsters have hacked into the network, they have access to every server, point of sale device, and PC connected to it.
Although the concept of card fraud may sound very complicated, it’s relatively low tech. Typically it involves either trapping a card in a machine and skimming the magnetic strip’s information, videoing the pin number as it’s being entered, or hacking into a network.
With the age of magnetic-strip technology and the fact that most ATMs still only read magnetic stripes, not chips, fraudsters will have plenty of opportunity since they are well-versed in breaching these systems.
It’s not just consumers that need to worry. With the most-afflicted industries being accommodation and food services, and with at least 50 percent of card-present fraud being charged back to the merchants, retailers need to focus on mitigating these risks.
The best way to mitigate the damage caused by card fraudsters is to invest in real-time fraud monitoring. Front-end solutions are not enough, so back-end technology needs to step up.
Transaction monitoring that provides behavioural profiling and detects suspicious patterns can help identify fraudulent activity in real time, reducing the losses to retailers and thwarting fraudsters’ attempts.
With card fraudsters at the ready, going for the gold will take on new meaning in London this summer. The Olympics is going to be unforgettable – let’s make sure it’s for the right reasons.
Fiserv is a global provider of information management and electronic commerce systems for the financial services industry.