Globally, over three hundred billion naira is lost annually to internet/credit card fraud worldwide. Interestingly, investigation has shown that the United States of America (USA) tops the list of countries where internet fraud thrives.
According to reports, data breaches in the US account for most of the credit card fraud affecting the EU.
Criminal gangs are making about 1.5bn euros (£1.2bn; $2bn) annually from such fraud, the EU police agency Europol says, regretting that compliance with new security features remains patchy.
With pockets of internet scams in Nigeria, for instance, one would have thought that Nigeria would top the list of countries with high rate of internet/credit fraud, the biggest now is US as reported by Europol; and Nigeria is, nowhere, close to US in terms of cases of internet fraud.
Nigerian online payments systems despite a short history and no recorded case of fraud are now being blacklisted on the Internet. Online businesses not only do not trust the integrity of Nigerian bank issued credit cards, they do not trust goods sold will be delivered. They do not trust that the Nigerian Customers will honestly acknowledge delivery of goods and services.
Unfortunately, the agency responsible for Nigerian cybercrime issues, the Nigerian Cybercrime Working Group (NCWG), does not have the resources to develop policies which will address these issues. Although there are no reliable data sources to quantify the amount of lost business transactions resulting from Nigerian Payment Systems rejection, it appears that from the number of Nigerians complaining on the Internet at various online forums, the numbers might be considerable.
Nigeria needs to develop a system that offers payment system guarantees, one that insures the delivery of goods and services sold to a Nigerian credit card holder on the internet. Nigerian financial institutions might find a solution to this dilemma in a system similar to “PayPal.” A system like this has fraud prevention controls that enable Nigerians to buy and sell securely on the internet.
In 2011 nearly all fraud involving EU cards took place outside the EU. Chip-and-PIN security used in the EU is not yet global, Europol notes.
Europol notes a range of problems in tackling credit card fraud:
Fraudsters distract consumers in shops and at cash machines to steal cards.
Another scam involves tricking cardholders out of their Pin by calling in the guise of their bank.
The fraud starts with the victim, often an older person, receiving an unsolicited call from someone claiming to be from their bank and suggesting their card needs replacing.
The caller often suggests the person should hang up and call the bank back to ensure the call is genuine. However, by giving a bogus number or staying on the line, the fraudster can then pretend to be from the bank.