New study reveals late shipment of payment cards creates security risk
A lack of care in the delivery of new credit, debit and charge cards and payment equipment could be allowing fraudsters opportunities to generate tens of millions of pounds in illicit income in the UK each year, says Simon Veale
A study by carrier management firm Global Freight Solutions (GFS) has found that 2% of all shipments of payment cards are probably either delivered late or, worse, fail to turn up at all.
GFS discovered that many companies only become aware of potential security problems by checking the codes of packages which haven’t arrived – after fraudsters could have struck.
Last year, card fraud in the UK was worth more than £440 million (US$625m), more than a quarter of which was accounted for either by cards lost in delivery or cashpoint or card payment machines that had been tampered with.
GFS MD Neil Cotty said payment system manufacturers and their customers had a right to expect more pro-active handling of such equipment. He added: “The card payment industry is right to say that chip-and-pin has reduced the potential for fraud.
“However, the security these machines or cards can provide is only as good as the security surrounding their delivery. Two per cent of late or lost deliveries may not sound a lot, but the fact that the materials involved may each handle many thousands of pounds’ worth of purchases should be real cause for concern.
“Companies despatching payment cards, ATMs or point-of sale machines will generally have to check individual parcel codes to find out where they might be. That paper chase creates a window of opportunity for criminals that could easily be shut.”
The GFS survey included comprehensive analysis of data from major carriers and the financial services and retail industries. Estimates suggest that there may be as many as 500,000 different cash or payment point machines in operation in the UK.
Cotty said the constant movement of new, faulty and upgraded machines across the country indicated the potential for crime, and the need to improve custody procedures.
“This would not only benefit a company that could potentially install a hacked payment machine and the customers whose cards might be abused, but the manufacturers of the equipment and the organisations that distribute credit, debit and charge cards.
“By removing the need to chase up every single parcel code from clients, we make our system more efficient and better for them. By being more pro-active, we enable manufacturers to keep clients better informed and, therefore, safer.”
Cotty’s comments come only two months after figures showed card fraud in the UK had risen by 40% in a year.
In addition, last month a chip-and-pin fraudster was jailed for four-and-a-half years after a court was told how he had masterminded the hacking of payment machines at petrol stations in a scam which had netted a potential £35 million.
Simon Veale is a Director at GFS
GFS discovered that many companies only become aware of potential security problems by checking the codes of packages which haven’t arrived – after fraudsters could have struck.
Last year, card fraud in the UK was worth more than £440 million (US$625m), more than a quarter of which was accounted for either by cards lost in delivery or cashpoint or card payment machines that had been tampered with.
GFS MD Neil Cotty said payment system manufacturers and their customers had a right to expect more pro-active handling of such equipment. He added: “The card payment industry is right to say that chip-and-pin has reduced the potential for fraud.
“However, the security these machines or cards can provide is only as good as the security surrounding their delivery. Two per cent of late or lost deliveries may not sound a lot, but the fact that the materials involved may each handle many thousands of pounds’ worth of purchases should be real cause for concern.
“Companies despatching payment cards, ATMs or point-of sale machines will generally have to check individual parcel codes to find out where they might be. That paper chase creates a window of opportunity for criminals that could easily be shut.”
The GFS survey included comprehensive analysis of data from major carriers and the financial services and retail industries. Estimates suggest that there may be as many as 500,000 different cash or payment point machines in operation in the UK.
Cotty said the constant movement of new, faulty and upgraded machines across the country indicated the potential for crime, and the need to improve custody procedures.
“This would not only benefit a company that could potentially install a hacked payment machine and the customers whose cards might be abused, but the manufacturers of the equipment and the organisations that distribute credit, debit and charge cards.
“By removing the need to chase up every single parcel code from clients, we make our system more efficient and better for them. By being more pro-active, we enable manufacturers to keep clients better informed and, therefore, safer.”
Cotty’s comments come only two months after figures showed card fraud in the UK had risen by 40% in a year.
In addition, last month a chip-and-pin fraudster was jailed for four-and-a-half years after a court was told how he had masterminded the hacking of payment machines at petrol stations in a scam which had netted a potential £35 million.
Simon Veale is a Director at GFS
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