I am pleased to have the opportunity to raise in the House this afternoon this important matter and I thank the Minister of State, Deputy Kathleen Lynch, for being here for the debate. Next week in the House we will discuss extensively the issue of political fraud, and we will read much about it today. I want to focus on a different fraud element which is seeing significant growth with the increase in the use of Internet and on-line purchasing. This specifically concerns card-not-present fraud, commonly known as CNP fraud. This is an increasing problem for Irish companies seeking to remain profitable, to protect jobs, to reach new markets and to grow a business. If a consumer is affected by CNP fraud - often referred to as ATM skimming - as I was this time last year, he or she is entitled to a refund from the bank or credit card company. When my card details were skimmed I got a phone call from the bank to say a suspicious transaction had been identified in Brazil; I was in Ireland and had never been to Brazil and the bank, correctly, stopped the payment.
There are no such protections, however, for retailers. Businesses do not get reimbursed for merchandise sent to fraudulent customers. The payment for these products are often flagged after the event and by this time the items will have been shipped and the retailer is usually left out of pocket. In my case the purchase in Brazil was stopped by the bank but there is no evidence as to whether the criminal activity continued or if the criminal managed to buy other goods.
I acknowledge that the Garda bureau of fraud investigation does excellent work in Ireland on CNP fraud, offering comprehensive prevention advice. However, the feedback I have from a large number of retailers in this country is that the bureau is under-resourced and lacks the equipment to follow up fully when crimes of this nature occur. I understand fully the pressures on An Garda Síochána currently and this is by no means a criticism of the excellent work it does. It is about assisting the Garda and providing the required tools.
Fraudsters are well aware of the points of weakness in the current system and frequently change patterns and delivery addresses to avoid detection. We must strengthen the preventative measures supporting retailers in tackling card fraud. This does not need to be a significant burden on the State and our already overstretched resources. Other countries, including the United States, the UK and most of mainland Europe have introduced what is known as address verification systems. This allows retailers to do a live check to ensure the person using the card knows the address to which the card is registered. This significantly inconveniences criminal elements looking to conduct on-line transactions as it is not enough to simply have the details of a card, as in most circumstances the card address is not readily available from the card. Checks of this nature can support retailers without an undue burdening of either State resources or individual consumers. Items can be still shipped to addresses other than those linked to the card but there are additional checks in place to ensure the transactions are legitimate.
There is a real opportunity to support retailers through the introduction of a similar address verification system for Irish transactions. It is not good enough that we do not have it in this country when so many international competitors throughout Europe, the US and our near neighbours in the UK have it. At a time when the Government is sending out a very strong and important message encouraging businesses to reach out to new markets to grow business, internationalise and export, it is important that we send out a clear message from this House and from the Government that we will do everything possible to support companies, to end fraud and to help firms to be profitable and to create jobs.
