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Story URL: http://www.silicon.com/financialservices/0,3800010322,39262807,00.htm

Businesses fear Sepa debit fraud risk
Experian identifies security gaps

By Julian Goldsmith

Published: Tuesday 22 July 2008

Financial administrators feel being unprepared for the Single Euro Payments Area (Sepa) directives could expose businesses to an increasing level of Direct Debit fraud.

The Sepa initiative seeks to create a common framework for cross-border Euro payments, using a single bank account and a single set of payments instruments across an area stretching from Ireland to Poland.

Instruments for credit transfers started last January, while processes for Direct Debits and debit cards should be in place by the end of 2010.

Cheat Sheets

♦ Basel II
♦ MiFID
♦ Sarbanes-Oxley

In a survey conducted by Experian of 180 corporates a third felt there was a lack of information on the migration to Sepa instruments. A similar amount considered Direct Debit fraud to be a main concern as thieves move away from payment card-based activities.

In a survey conducted by Experian in April, 98 per cent of respondents have no plans to enhance payment fraud checks as they join Sepa, even though the increased volume in high speed transaction processing could expose their systems to frausters.