WRITTEN QUESTION P-2822/00

by W. G. van Velzen (PPE-DE) to the Council

(1 September 2000)

Subject: Credit card fraud on the Internet

Credit card fraud has been found to occur far more frequently on the Internet than in traditional shops. Major credit card companies confirm that this is a big problem, which may jeopardise the further development of and confidence in the new Internet economy. According to a publication by the Netherlands Public Prosecutions Department, investigating credit card fraud involving the Internet has low priority, both within the EU Member States and internationally, despite the large number of victims.

1. Can the Council indicate the state of affairs in this regard (how much Internet credit card fraud is reported, what are the figures for credit card payments in traditional shops)? Can the Council confirm that credit card fraud is approximately three times as common in connection with Internet transactions as in normal credit card transactions?

2. Is such credit card fraud indeed an obstacle to the development of e-commerce and e-europe? How is the Council minimising the adverse consequences and, bearing this situation in mind, how is the Council ensuring the attainment of the objectives formulated at the special ICT summit in Lisbon?

3. In the light, inter alia, of the special summit in Lisbon on ICT policy in the EU, what priority is currently assigned to investigating such fraud and prosecuting offenders?

4. Can the Council confirm that the low priority assigned to investigating such fraud in the EU impairs public confidence in the Internet economy in the EU and that the good intentions stated at the special ICT summit in Lisbon may consequently be jeopardised?

5. How can the priority assigned to investigating such fraud and other Internet-related fraud and prosecuting offenders be raised in order to continue to promote the development of e-commerce in the EU as fully as possible?

6. When will the Council raise this priority?

Reply

(8 March 2001)

The extent of credit card fraud has not been quantified by the Council, but the European Parliament produced the following figures in its report on the draft framework Decision(1):

Globally, the payment-card industry has a turnover of some USD 2 000 billion, between 0,1 % and 0,2 % of which is lost to various forms of payment card fraud; in other words, some USD 3 billion is siphoned off annually from the normal economy by criminals. About 25 % of all losses are incurred by issuers in the European Union. Most credit-card crime is committed on an organised basis. Eurocheque fraud also causes considerable losses (in 1995 some ECU 41 million).

The need to combat this type of fraud was taken into account in the action plan of the Council and the Commission of 3 December 1998 on how best to implement the provisions of the Treaty of Amsterdam on an area of freedom, security and justice(2). That action plan mentions high-tech crime among the types of criminal behaviour which should be approached in an equally efficient way throughout the European Union and for which the possibilities of improving coordination of prosecution, whenever greater efficiency can be reconciled with respect for individual rights, must be examined.

The Honourable Member will also note that, at its special meeting in Lisbon on 23 and 24 March 2000, the European Council stated that the rules for electronic commerce must be predictable and inspire business and consumer confidence. It called on the Council, along with the European Parliament where appropriate, to adopt as rapidly as possible during 2000 pending legislation on the legal framework for electronic commerce and suggested that the Commission and the Council consider how to promote consumer confidence in electronic commerce.(3)

The Council has since reached provisional agreement, at its meeting on 29 May 2000, on a draft framework Decision on combating fraud and counterfeiting of non-cash means of payment. The aim of the draft is to ensure that fraud in respect of non-cash means of payment is recognised as a criminal offence and is punishable by effective, proportionate and dissuasive penalties in all the Member States. It also aims to introduce suitable cooperation mechanisms so that such offences can be prosecuted effectively, without prejudice to the Member States' right to criminalise other forms of fraud in respect of non-cash means of payment. In its Opinion of 5 July 2000, the European Parliament agreed to this draft, which is still the subject of parliamentary scrutiny reservations in some Member States. Those reservations will probably be withdrawn very soon, and formal adoption is planned for early 2001.

(1) Report by the Committee on Citizens' Freedoms and Rights, Justice and Home Affairs on the proposal for a Council framework Decision on combating fraud and counterfeiting of non-cash means of payment (COM(1999) 438-C5-0066/2000 1999/0190(CNS)).

(2) OJ C 19, 23.1.1999, p. 1-15.

(3) Presidency conclusions.