Brief – New rules protect banks from fraud by dodgy credit dealers

The Commission has
agreed with leading credit card companies on a set of guidelines
which will protect banks from potentially fraudulent merchants.

The EU’s Committee of Data Protection
Authorities has negotiated the new rules with Master Card and VISA.
They allow banks access to databases containing details of
‘terminated’ merchants – those whose right to use the
companies’ credit cards has been withdrawn, mainly for reasons
related to fraud. This will allow banks to check the
trustworthiness of merchants seeking credit facilities before
signing contracts with them.

Forecasts predict, says the Commission, savings
from prevention of fraud of € 200 million.

The guidelines set down rules on how the
databases, which may operate nationally and across borders, can be
kept, what information is stored and who can access the data, thus
protecting merchants’ privacy, bank security and ultimately the

The new guidelines come at a time when credit
card fraud is a major concern: figures released by the UK’s
Association for Payment Clearing Services show that £500 million
(over €700 million) was lost to fraud in the UK last year.

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