Chapter 3 - Crime Areas

3.4 Payment fraud - Law enforcement considerations

Limited resources is one of the main challenges faced by EU law enforcement when investigating payment card fraud. This is a consequence of several factors, one of which is under reporting. The resulting incomplete intelligence picture prevents the linking of associated incidents resulting in insufficient allocation of resources for the investigation. Limited resources then have a negative effect on crime detection, which in turn leads to further under reporting as victims may get the impression the police cannot effectively deal with the online fraud cases.

For the financial industry, fraud losses are a sensitive topic, as disclosure of this information in an attributable way could cause reputational damage. Similarly, companies that experience data breaches are concerned with PR issues instead of reporting the attack for LE investigation. These factors lead to under reporting of crime and an artificially low perception of the risk of the crime by society. To address the issue, some Member States have created confidential reporting mechanisms for businesses - the financial industry in particular.

The limited number of resources is also affected by the lack of ability to link related incidents to a single case. While the total damage of an attack might be significant, the reported crimes may end up fragmented among many incidents that are never associated as a single case. This contributes to a lack of justification for the resources needed to run an investigation.

Companies looking to implement cost cutting measures may be increasingly tempted to outsource payment processing operations to third world countries. However, the savings may come at the price of more relaxed security measures, possibly resulting in large scale data thefts. An increasing level of outsourcing will result in further obstacles for law enforcement authorities requesting data for evidential purposes.

While EMV technology has managed to decrease skimming within the EU, this has pushed the cashing out of cards overseas, making it more difficult for LE to obtain evidence.

GPS receivers are getting smaller, discreet and manage to operate longer. This provides law enforcement with an interesting possibility to arrange controlled deliveries of goods ordered by the fraudsters.