Once Bitten...
Is your ‘flexible friend’ really an
enemy in disguise?
For millions of European credit
card users, the dream
of a one-card-buys-all, cash-free society has turned into a nightmare of card
fraud, escalating debts and increasing interest payments.Latest research on behalf of the European Security Transport Association (ESTA) reveals that more than 22 million European adults have fallen victim to card fraudsters, with their card details stolen or used without their permission.
Just as worrying is an EU report that 32 per cent of card fraud victims are never reimbursed by their bank, despite claims to the contrary by the banking industry.
Card fraud is now such big business that a Europol investigation is currently under way into the connection between it and organised crime, and its implications. Meanwhile, credit card debt is ballooning in many countries, creating financial problems for its victims. And ever-increasing credit limits lure the unwary ever deeper into spending money they do not have.
Fraud
… debt … increased cost of use … it is hardly
surprising that more and more Europeans are falling out of love with their cards.
| In Britain alone, where
the average consumer now owes £4,5ll to credit card, hire purchase and unsecured loan companies, record
numbers of people are going bankrupt and insolvent every month – an estimated total of 110,000 during
2006, according to Louise Brittain, head of insolvency at City accountants Baker Tilly. In their last published half-yearly reports (to June 2006), Britain’s big banks revealed soaring bad debt due to credit card defaults. UK National Savings and Investments explains: “The convenience of the cashless lifestyle has created a group of ‘cavalier cardholders’ who use cards for everyday purchases, but are less in control of their spending as a result. More than a third of overspenders (37 per cent) go over budget on their debit cards because handing over their cards does not register as spending.”  | The
debt and fraud findings flash up a powerful warning signal to officials of the European Union who are
pushing for greater use of electronic payments through their Payment Services Directive. ESTA secretary general Francis Ravez, representing the cash logistics industry throughout Europe, says: “It is incredible how many people across Europe have fallen victim to card fraudsters and unsurprising that so many victims favour a return to cash.  “These findings come amid an on-going campaign by the electronic payments industry to see credit and debit cards used as the preferred method of payment and as the European Commission debates ways to reduce the use of cash. "Consumers should have the freedom to choose how they pay and should not be dictated to by banks and regulators looking to increase revenues from electronic transactions.” |
ESTA research has found that almost two thirds of Europeans strongly support the retention of cash as a payment method. And the EC’s latest EuroBarometer survey revealed 49 per cent of consumers selected cash as their preferred payment method.
Ravez comments: “At ESTA we believe that a world in which electronic payments and cash continue to co-exist is essential and desirable to maintain competition, consumer choice and to serve the needs of business of all sizes across the EU.”
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Once bitten...
