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Fraud Reporting - It's Criminal

Understanding the scale and source of global fraud is vital if the industry is going to tackle it. Yet getting a handle on what is really taking place is a challenge. Every country seems to have a different way of measuring fraud, and each organisation within those countries often provides statistics that are not consistent with each other.

But if we as an industry cannot agree on standardised fraud reporting that treats everything in the same way, and provides a set of data that is globally comparable, we cannot ever really know the best way to tackle the problem.

While there is a wealth of information about fraud levels across the globe, there is little consistency in what it is saying. Taking a look at the figures over the last five or so years illustrates the point. In Italy there are measurements in terms of value with, for example, a €55 million loss to fraud in 2005 rising to €64 million in 2006. In 2007, skimming in The Netherlands cost €15m, rising to €31m in 2008. In Spain, card theft was responsible for the largest volume of fraud on cards, accounting for 41 per cent of purchase fraud alone. In the UK crime and card fraud losses reached £609.9m in 2008, up from £535.2m in 2007, driven by card-not-present crime. There was also a 63 per cent increase in reported financial crime in March 2009 compared to the same month in 2008. While useful in isolation, these statistics tell us very little about the overall problem and what can be done globally to tackle the growing problem of fraud.

Whatever the solution – and it is clear that there isn’t one at the moment – it is high time that a debate about consistency in fraud reporting was kick-started both in terms of the figures being reported and the categorisation and terminology used. And this needs to involve not just the banks, but the governmental organisations and other stakeholders. This would help these organisations make better informed decisions about tackling crime. Ultimately, it would provide true transparency to corporate customers and consumers, which can only serve to build trust in the banks and the financial sector as a whole.