Mobile phones beaming their owners' locations back to banks could dramatically cut credit card fraud, Ericsson says.
In 2007, nearly 40 percent of the $845 million in fraudulent transactions on UK cards was done overseas according to APACS, a payment card trade association from the United Kingdom.
When individuals travel to countries which banks consider to be “high-risk” for fraud, their cards could be blocked, and said individuals left with an inability to access money. Not only can this be inconvenient and embarrassing but it could potentially be dangerous. A new service by Ericsson, IPX Country Lookup, would be compatible with GSM networks and would deliver location information (country only, and not exact location) from an individual’s mobile phone to confirm that the use of the card was legitimate.
For the service to be effective, the technology would have to be installed on a wireless provider’s network. After it was installed a fee would be paid to the provider each time a transaction was verified via the GPS location of the mobile phone. The service would still work regardless of whether or not a person had their phone turned off, as long as they had powered the device on at least once while in a foreign country, so that registration with the local network operator could occur.
Ericsson says people would need to give consent to their bank prior to using the transaction verification service, and also allayed privacy concerns by saying location data would not be stored, but rather, used only to verify the validity of the transaction at the time.
Banks would be able to tailor the service with their own policies and procedures. For instance- if a bank only wanted to use the service in specific countries which it deemed high risk like Russia, Romania or China, they would be able to do that.
Meanwhile, Aussie banks are allowing consumers to lock down their online account access in the face of rising fraud. National Australia Bank now allows people to 'lock' their internet banking account, so it can't be accessed even if the right username and password are entered. To unlock the account, the customer has to ring telephone banking and enter a different username and password, then unlock the account.
Commonwealth Bank's new mobile phone browser internet banking service also only allows transfers to people who you've transferred money to previously on your regular computer internet banking, a measure which banking executives frankly admitted was partly intended to stop mobile phone internet banking muggings, where a person could be forced at gunpoint to log in to their internet banking and hand over their phone to a thief.