Mass network compromise cause of most online fraud

May 12, 2009, 10:07 AM —  Network World — 

Mass compromise of merchant networks and card processors is viewed as the main cause of payment-card fraud, according to a survey of 113 financial services firms, which was published Tuesday.

In contrast, online attacks -- such as phishing -- are seen as a far less-significant cause of card fraud by the survey's respondents, who are management executives and antifraud or security managers at financial institutions in the United States, Europe and Asia.

According to the survey, sponsored by security firm Actimize, 94% of the 113 financial-services firms could trace some percentage of payment-card fraud they experienced directly back to mass compromises of networks.

In the survey, several examples of mass compromise events were given, including those known to have occurred at Heartland Payment Systems, grocery retailer Hannaford Brothers, retail-store chain TJX, as well as HNRC. RBS, BJs, DSW and Countrywide.

When asked the question: "Do you believe you have seen stolen data from the mass-compromise events used in fraud attacks?", 55% of the respondents answered "none", but the remainder pointed most frequently to TJX and Heartland.

About 85% of the respondents said they decided to reissue payment cards to between 1% to more than 20% of their cardholder population in response to news of a mass compromise although there was no immediate indication of fraud losses.

In contrast, online scams are seen as having much more minimal impact in terms of card fraud. About 36% of the survey respondents said that less than 1% of card fraud they experienced was due to online scams such as phishing. About 40% blamed online card scams for 1% to 4% of card fraud they witnessed, and only 1.67% blamed online scams for more than 20% of the card fraud they experienced.

The survey also asked about ATM/debit card fraud claims specifically. More than 69% of survey respondents said their organizations had seen an increase in ATM/debit-card fraud last year in comparison to the prior year, with the majority citing between 5% to 49% increase.

In addition, more than 73% of the financial institutions indicated they had no technology in place to stop fraudulent transaction in real time. The amount of losses in 2008 due to ATM fraud cited by institutions ranged from $744,321 to $12 million.

Network World

Sign up for ITworld's Daily newsletter
Follow ITworld on Twitter @IT_world

I like it!
Close

On Twitter now

security

Powered by Twitter
You are logged in | Sign out
Sign in and post to Twitter

What are you thinking?

Cancel Tweet sent

On Twitter now

Post a comment
The content of this field is kept private and will not be shown publicly.
  • Allowed HTML tags: <a> <em> <strong> <cite> <code> <ul> <ol> <li> <dl> <dt> <dd>
  • Lines and paragraphs break automatically.
peer-to-peer

jfruh
Apple syncing patent can't come soon enough

pasmith
New Twitter features borrow from 3rd party clients

Esther Schindler
Open Source Changes the Software Acquisition Process

mikelgan
How to set up continuous podcast play on the new iTunes

David Strom
Five important Windows 7 mobility features

sjvn
Guard your Wi-Fi for your own sake                        

Sandra Henry-Stocker
Grepping on Whole Words

 

Sidekick: The Good News & the Bad News
Either way you look at it Microsoft Data Center management did not follow standards or best practices in this failure. In which case it makes me wonder more about the outsourcing of corporate data much less personal data.
- mburton325

Join the conversation here

The Daily Tip

The Daily TipQuick, practical advice for IT pros. Made fresh daily.

Hot tips:

Want to cash in on your IT savvy? Send your tip to tips@itworld.com. If we post it, we'll send you a $25 Amazon e-gift card.

Newsletters

Subscribe to ITWORLD TODAY and receive the latest IT news and analysis.

I would like to receive offers via email from ITworld partners.
By clicking submit you agree to the terms and conditions outlined in ITworld's privacy policy.
Featured Sponsor

AISO founders envisioned a Web hosting company that was environmentally friendly. While the company employed energy-efficient innovations like solar panels, its infrastructure produced unacceptable power and cooling requirements. Find out how AISO leveraged AMD technology to overcome their challenge in this case study white paper.

In this whitepaper, Scalar explores the opportunity to change the landscape with respect to mission critical databases built around Oracle. Leveraging technologies such as Linux, high-end commodity processing power and Oracle RAC technology to architect, design, build and maintain database infrastructure that delivers maximum availability, reliability and performance at a fraction of traditional cost.

On a typical day, weather.com, the Web site for The Weather Channel in Atlanta, serves up between 15 million and 20 million page views. But in September 2004, when back-to-back hurricanes ransacked Florida, the peak traffic on one day more than tripled: over 70 million page views by more than 7 million unique visitors. Read the full success story now.

Marketplace