# CE2004065EN.01003101.xml

| 13.3.2004 | EN | Official Journal of the European Union | CE 65/31 |
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13.3.2004

EN

Official Journal of the European Union

CE 65/31

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(2004/C 65 E/031)

WRITTEN QUESTION E-0475/03

by Erik Meijer (GUE/NGL) to the Commission

(20 February 2003)

Subject:   Fraud-sensitive electronic payments as a result of the possibility of criminals to emptying bank accounts

Subject:

| 1. | Is the Commission aware that criminals are constantly finding new ways of obtaining access to the secret PIN codes of bank account holders, for instance by:






  (a) | stealing bank cards and threatening the victims with further violence if they do not disclose their PIN codes; |
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1.

Is the Commission aware that criminals are constantly finding new ways of obtaining access to the secret PIN codes of bank account holders, for instance by:

(a)

stealing bank cards and threatening the victims with further violence if they do not disclose their PIN codes;

| (b) | keeping permanent watch on ATMs to find out the codes being used before people take their banknotes and then seizing the bank cards and using them to obtain cash; |
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(b)

keeping permanent watch on ATMs to find out the codes being used before people take their banknotes and then seizing the bank cards and using them to obtain cash;

| (c) | copying of PIN codes and account numbers by staff at automatic petrol pumps or in shops and restaurants where customers' card payments are registered, after which cash can be withdrawn using a counterfeit card. |
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(c)

copying of PIN codes and account numbers by staff at automatic petrol pumps or in shops and restaurants where customers' card payments are registered, after which cash can be withdrawn using a counterfeit card.

| 2. | Is the Commission aware that a new stratagem has recently been seen in the Netherlands where letters are stolen from private letter boxes, existing accounts are transferred from one name to two names, after which the second person applies for a PIN code and bankcard and access to the account by phone or computer, money is then transferred from savings accounts to current accounts and finally the current accounts are emptied using the bank cards obtained? |
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2.

Is the Commission aware that a new stratagem has recently been seen in the Netherlands where letters are stolen from private letter boxes, existing accounts are transferred from one name to two names, after which the second person applies for a PIN code and bankcard and access to the account by phone or computer, money is then transferred from savings accounts to current accounts and finally the current accounts are emptied using the bank cards obtained?

| 3. | Are these problems greater in some Member States than in others? How can this be explained? |
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3.

Are these problems greater in some Member States than in others? How can this be explained?

| 4. | Has the stratagem described in paragraph 2 now spread to other EU Member States? Have the Member States concerned developed effective safeguards? |
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4.

Has the stratagem described in paragraph 2 now spread to other EU Member States? Have the Member States concerned developed effective safeguards?

| 5. | Is the Commission leaving it up to individual banks, national banking advisory bodies and national legislators to find solutions and compensation arrangements for account holders affected or is it contributing, by pooling experience in this area at EU level, to the development and introduction of security measures that are uniform and effective for all EU Member States? |
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5.

Is the Commission leaving it up to individual banks, national banking advisory bodies and national legislators to find solutions and compensation arrangements for account holders affected or is it contributing, by pooling experience in this area at EU level, to the development and introduction of security measures that are uniform and effective for all EU Member States?

Source: De Volkskrant newspaper, 7 February 2003.

Answer given by Mr Bolkestein on behalf of the Commission

(1 April 2003)

(1 April 2003)

| 1. | Yes, the Commission is fully aware of the stratagems mentioned by the Honourable Member, as well as of other ways in which cards, PIN codes and bank accounts are compromised. The modus operandi described are well known by payment industry investigators and law enforcement officers. |
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1.

Yes, the Commission is fully aware of the stratagems mentioned by the Honourable Member, as well as of other ways in which cards, PIN codes and bank accounts are compromised. The modus operandi described are well known by payment industry investigators and law enforcement officers.

| 2. | In general, techniques of identity theft (which consists in the misuse of personal data to impersonate somebody else and abuse of his/her bank facilities) are well known by payment industry investigators and law enforcement officers. The technique used in this specific case (stealing letters from mailboxes to obtain personal data and then asking for a second card and PIN code, phone-banking code or e-banking password in order to empty the bank account) is one way of committing identity theft. The Commission is aware that identity theft is the fastest growing type of payment fraud in some Member States. It was not yet aware that the modus operandi described is particularly used in the Netherlands. |
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2.

In general, techniques of identity theft (which consists in the misuse of personal data to impersonate somebody else and abuse of his/her bank facilities) are well known by payment industry investigators and law enforcement officers. The technique used in this specific case (stealing letters from mailboxes to obtain personal data and then asking for a second card and PIN code, phone-banking code or e-banking password in order to empty the bank account) is one way of committing identity theft. The Commission is aware that identity theft is the fastest growing type of payment fraud in some Member States. It was not yet aware that the modus operandi described is particularly used in the Netherlands.

| 3. | The problem of payment card fraud is particularly relevant in the United Kingdom, and in countries like Germany, Spain, France, Italy and the Netherlands (i.e. the Member States where the largest card issuing banks are located or where foreign counterfeit cards are more often used in shops). The problem of identity theft is particularly relevant in the United Kingdom. |
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3.

The problem of payment card fraud is particularly relevant in the United Kingdom, and in countries like Germany, Spain, France, Italy and the Netherlands (i.e. the Member States where the largest card issuing banks are located or where foreign counterfeit cards are more often used in shops). The problem of identity theft is particularly relevant in the United Kingdom.

| 4. | The specific technique used in the Netherlands has been used also in the United Kingdom. The Commission has no information on the use of this specific technique in other countries. In the United Kingdom, the Credit Industry Fraud Avoidance System (CIFAS) (1) is combating identity theft. The British Cabinet office issued in July 2002 a report on identity theft. |
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4.

The specific technique used in the Netherlands has been used also in the United Kingdom. The Commission has no information on the use of this specific technique in other countries. In the United Kingdom, the Credit Industry Fraud Avoidance System (CIFAS) (1) is combating identity theft. The British Cabinet office issued in July 2002 a report on identity theft.

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| 5. | The Commission agrees with the Honourable Member that, notwithstanding the considerable efforts of the national private and public sectors, there is a need for a more co-ordinated approach to the problem. Also as a result of Resolution no. C4 0455/98 of the Parliament, the Commission is taking action to increase the security of payment transactions. To prevent fraud and counterfeiting of non-cash payments, the Commission adopted in February 2001 a three-year Fraud Prevention Action Plan (2) based on a partnership among all stakeholders. It provides for five main areas and 11 main actions that the Commission and other parties should undertake. Security improvements are the main priority of the Action Plan, which supports the introduction of the highest economically viable level of security.
  Discussions on identity theft and security issues, including on the progress in the migration to chip cards in the Union, take place regularly at the meetings of the Union Fraud Prevention Experts Group, the steering group for the implementation of the Fraud Prevention Action Plan.
  The Commission will organise in 2003 a Conference on the security of payments in the Internal Market, with a view to improve information on the security of modern payment products and systems.
  After the end of 2003, the Commission will report to the Parliament and the Council on the progress achieved with the Fraud Prevention Action Plan and propose, if necessary, further action.
  The Commission also proposed a Council Framework Decision combating fraud and counterfeiting of non-cash means of payment, that has been adopted on 28 May 2001 (3). This text aims at ensuring that fraud and counterfeiting of non-cash means of payment, including credit cards and other cards issued by financial institutions, are criminal offences in all Member States, punished by effective, proportionate and dissuasive sanctions. Member States shall bring into force the measures necessary to comply with this Framework Decision by 2 June 2003. |
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5.

The Commission agrees with the Honourable Member that, notwithstanding the considerable efforts of the national private and public sectors, there is a need for a more co-ordinated approach to the problem. Also as a result of Resolution no. C4 0455/98 of the Parliament, the Commission is taking action to increase the security of payment transactions. To prevent fraud and counterfeiting of non-cash payments, the Commission adopted in February 2001 a three-year Fraud Prevention Action Plan (2) based on a partnership among all stakeholders. It provides for five main areas and 11 main actions that the Commission and other parties should undertake. Security improvements are the main priority of the Action Plan, which supports the introduction of the highest economically viable level of security.

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Discussions on identity theft and security issues, including on the progress in the migration to chip cards in the Union, take place regularly at the meetings of the Union Fraud Prevention Experts Group, the steering group for the implementation of the Fraud Prevention Action Plan.

The Commission will organise in 2003 a Conference on the security of payments in the Internal Market, with a view to improve information on the security of modern payment products and systems.

After the end of 2003, the Commission will report to the Parliament and the Council on the progress achieved with the Fraud Prevention Action Plan and propose, if necessary, further action.

The Commission also proposed a Council Framework Decision combating fraud and counterfeiting of non-cash means of payment, that has been adopted on 28 May 2001 (3). This text aims at ensuring that fraud and counterfeiting of non-cash means of payment, including credit cards and other cards issued by financial institutions, are criminal offences in all Member States, punished by effective, proportionate and dissuasive sanctions. Member States shall bring into force the measures necessary to comply with this Framework Decision by 2 June 2003.

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(1)  www.cifas.org.uk

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(2)  COM(2001) 254 final.

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(3)  OJ L 149, 2.6.2001.

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