Improving legal cooperation between Member States on combating cyberfraud is a step in the right direction, said the EESC in a recently adopted opinion assessing the Commission's draft directive on Combating fraud and counterfeiting of non-cash means of payment. However, the Committee calls for more safeguards to protect users of digital payment instruments and for mandatory prevention measures to alert them to cybercriminals' ways of operating.
While welcoming the Commission's proposal, the EESC flags up the need to go beyond investigative and judicial cooperation between law enforcement authorities in the Member States.
The EESC suggests that Member States should be required to institute financial insurance to compensate the victims of cyberfraud involving payment cards. This financial insurance should cover both individuals and SMEs. "The directive as it stands only requires Member States to provide cyberfraud victims with adequate information and advice. This is not enough. Victims must be given full financial compensation for the damage they suffer," said the writer of the opinion Victor Alistar, a member of the global anticorruption coalition Transparency International.
In addition, for the fight against cyberfraud to be effective, economic operators should be legally required to report cyberfraud incidents, as is the case with money laundering. Experience shows that they are reluctant to report incidents involving cards issued by them for fear of losing consumer confidence.
Cyberfraud involving electronic means of payment, particularly credit and debit cards, issued in the euro area is a major problem. According to a report issued by the European Central Bank, it amounted to EUR 1.4 billion in the EU in 2013. Since then, it has been on the rise.
One of the most vulnerable areas is the digital payment of travel expenses – train and plane tickets, accommodation and other related transactions. A 2015 IATA report reveals that airlines lose an annual 1 billion USD globally in card fraud. Among the people involved in or profiting from this type of cyberfraud are individuals and organisations engaged in terrorist activities.
Prevention should also play a major role in the fight against cybercrime, in the EESC's view. The public should be alerted to the ways in which cybercriminals operate in forging cards and other digital means of payment, with law enforcement authorities in the Member States providing awareness-raising and information campaigns explaining the causes, risks and ways for individuals to protect themselves against cyberfraud.
Gathering statistics in all Member States on cybercrime involving electronic means of payment is also important, the EESC argues, to fully understand this issue and combat it more effectively.