Visa roll out new credit card to beat the fraudsters

Posted in 'Identity Theft' by Richard Catlin

15 May 2009

Visa is rolling out a trial of a new credit card with an in-built display, keypad and battery, in a bid to beat fraud. The cards use an extra layer of security to ensure that that the card is present at the time a transaction is carried out.

The new cards, known as Emue, are to undergo a 3-month closed trial at consultants Delloitte, with the aim of rolling the technology to consumers sometime next year if successful.

Card Not Present (CNP) fraud has grown steadily - from around £150m in 2004 to over £328m last year. One of the main reasons for this is that whilst the roll-out of Chip & PIN technology has helped to combat face-to-face card fraud (falling from £218m to £98m in the same period), it has encouraged criminals to switch their attentions to CNP fraud.

CNP fraud involves internet, telephone and mail order transactions, but also involves overseas fraud – where cloned cards are used in countries that are yet to adopt Chip & PIN. Indeed, overseas fraud involving stolen UK card details almost doubled between 2006 and 2008.

If the trial is a success, the new Emue card could help to stop CNP fraud in its tracks. Whenever a transaction is attempted, the cardholder would have to enter their normal PIN onto the mini-keypad embedded on the card itself. This would in turn generate a random 4 digit ‘Emue code’ that would be entered in conjunction with the normal card details.

This would replace the existing ‘calculator’ style card verifiers, which are bulky and can’t be carried around easily. Visa say that if trials prove a success, it would be up to individual banks to decide whether to incorporate it into their cards.

The first quarter of 2009 saw Identity Theft surge by 40% compared to the same period last year, as criminals responded to the tighter lending criteria imposed by lenders in the recession by targeting existing, credit-worthy identities to exploit.

So whilst Emue technology might help to reduce levels of CNP fraud, the battle against identity theft is one that is facing fresh challenges. Because criminals are using existing identities to open new credit accounts, many people will be completely unaware that they have fallen victim until they are contacted by a lender seeking repayment of a debt.

You can help reduce your chances of falling victim to identity fraudsters by seeing which parts of your lifestyle put you at risk. Where you eat, which cards you use and even where you go on holiday could all determine whether you are targeted. See if you are vulnerable using our Free Identity Theft Check Service.

Keeping a close eye on your credit files can also help you spot the early warning signs of attempted fraud. You can monitor your file based on all three credit reference agencies for just £17.55 a quarter with checkmyfile – that works out to less than £2 per agency per month.

Check yours here