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Payment Fraud Linked to Terrorism and Trafficking

Payment card fraud is being used around the world to fund and launder the proceeds from organized crime, drug and human trafficking, terrorism and more, according to a new report from Terbium Labs.

The dark web intelligence firm analyzed 274 cases over the past decade across North America and Europe to compile its new report, The Next Generation of Criminal Financing: How Payment Fraud Funds Transnational Crime.

It recorded losses of over $1bn associated with those 274 cases. In North America, most were linked to identity fraud (33%), organized crime (32.5%), human trafficking (17.5%) and drug trafficking (15%). In Europe, organized crime (62%), drug trafficking (41%) and money laundering (41%) were most common.

North America also had the highest rate of terrorism-linked fraud cases, with more than seven-times as many cases as Europe, although still at a relatively low 8%.

The report detailed specific examples of stolen payment card data being used in criminal activity, including by Russian gangs, Sri Lankan criminals, Hezbollah, al Qaeda and even the Russian state.

Terbium Labs called for more to be done by financial institutions to tackle the fraud epidemic.

“Payment fraud is not just a fraud problem. It can no longer be viewed as a non-violent crime, mere annoyance, or unfortunate cost of doing business,” said Emily Wilson, VP of research at Terbium Labs. 

“Criminal justice agents must strive for a fuller understanding of the role fraud plays in serious criminal cases and the shifting landscape of the fraud economy. We're calling on the criminal justice system to create updated, standardized reporting requirements for investigations and case documentation in order to accurately and consistently track the links between payment fraud and transnational crime.”

Online payment fraud losses are set to more than double between 2018 and 2023 to reach a staggering annual figure of $48bn, according to Juniper Research.

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