By silicon.com, 7 October 2005 17:25
Earlier this week the CEO of credit card giant Visa announced that his company is investing $200m into 'anti-fraud measures' in a bid to get tough on scammers and card thieves.
Two points on this. Firstly, Visa and other financial services firms must be experiencing well over that amount in fraud-related losses for such an investment to make any sort of business sense. Interestingly, last year the Association of Payments and Clearing Systems (Apacs) said phishing scams accounted for £12m in losses for banks - a figure which, based on Visa's announcement, appears suspiciously low.
Secondly, it would do no harm for other organisations to follow Visa's lead. The financial services industry currently faces a significant challenge in building consumer confidence in new trading methods - in large part due to fear of online fraud and identity theft.
Several high-profile cases of data loss haven't helped - including one involving MasterCard and Visa earlier this year, in which both suffered a data breach that affected tens of thousands of customers. Visa could do worse than attribute more resources to the problem. But the question is: will it stop the scammers?
Visa CEO John Coghlan, it seems, thinks wiping out fraud will also require legislative action. He called for tougher data breach disclosure laws, which force companies to tell customers if their data is at risk.
This idea is currently more prevalent in the US but might be worth a look in the UK and the rest of Europe. Such laws could just kick-start companies into being more careful with their customers' details - and that would be no bad thing at all.
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