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Bank fraud and losses cardholders are stuck with

The latest report from the Bank of Greece (BoG) on Financial Stability highlights that fraudsters prefer transactions with credit transfers which increased 300% in 2020, in relation to 2019.

Online bank payments have become the “Eldorado” for digital fraudsters in a field worth more than 700 billion euros annually, offering enormous opportunities to deceive those using Internet banking. At the same time, it is a concern for cardholders that those caught up in fraud end up paying almost a third of the damages caused.

The latest report from the Bank of Greece (BoG) on Financial Stability highlights that fraudsters prefer transactions with credit transfers which increased 300% in 2020, in relation to 2019. This category of transactions has a total value of almost four times the Greek GDP and is of particular interest to scammers.

In particular, as stated by the BoG, "based on the data for the year 2020, 477 million customer transactions were carried out using a credit transfer worth 718 billion euros. In relation to the year 2019, there is an increase in the number of transactions by 35% and an increase in the corresponding value by 3%." Obviously, the large increase in the number of transactions in 2020 is also related to the conditions created by the pandemic.

"As a result of the disproportionate percentage increase in the number of transactions in relation to the increase in value, there is a decrease in the average transaction value of 24% to 1,504 euros in 2020, from 1,979 euros in 2019," notes the central bank.

Paying the bill

Regarding the number of fraud cases, the Bank of Greece has recorded a large increase, both in the number of cases and in value. In particular, as stated in the report, "in the year 2020 there was a significant increase of 298% in cases of fraud in credit transfers and by 313% in their respective value. Specifically, 1,179 cases of fraud were recorded with a total value of 6.2 million euros compared to 2019 where 296 cases of fraud with a total value of 1.5 million euros were recorded."

But how do the fraudsters trick their victims? The BoG says that this is done by one of two ways:

  • “The analysis of the data shows that the majority of fraud techniques involve the methods of (a) issuing a payment order by the fraudster as well as (b) manipulating payers.
  • According to the first method, the fraudster issues a fake payment order after obtaining the sensitive payment data of the payer or the beneficiary by fraudulent means, while according to method (b) the payer gives his consent in good faith to the execution of a payment order on behalf of a third party. considering that it belongs to a legal beneficiary ".

When it comes to card transactions, the cardholder often ends up out of pocket. According to the BoG, almost one third of the losses (29%) are borne by cardholders and the rest are shared by service providers (eg Visa, Mastercard) and card issuers (banks).

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