Start Date
13-2-2012 3:00 PM
End Date
13-2-2012 4:00 PM
Description
Abstract: For years, credit card fraud has been a major problem in the Indonesian payments system. Numerous efforts have been made to mitigate this payment crime. Nevertheless, the high fraud losses recorded in particular by banks and other parties in credit card networks suggests that more actions still need to be taken. For this, formulation of a sound fraud prevention strategy is paramount to the success in combating credit card fraud in a payments system. Such a strategy will ensure that available resources are allocated effectively and efficiently. This article, which is based on the author’s PhD research, seeks to assess the soundness of the credit card fraud prevention strategy in the Indonesian payments system. For analytical purpose, references are made to similar practices in other countries such as the United States, the United Kingdom and Australia. The study was conducted using document review and interviews and was focusing on the period of 2003 through 2007 The discussions in this article conclude that just as in other countries such as the United States, the United Kingdom and Australia, the essentials of credit card fraud prevention practice in the Indonesia comprise six key areas of resource allocation: understanding of the real problems; fraud prevention policy; fraud awareness; technology-based protection, identity management; and legal deterrence. These six key areas are mainly supported by four pillars: user; institution; network; and government and industry. However, credit card fraud prevention practice in Indonesia is still at a lower level of robustness than those in the benchmark countries. Deficiencies in the credit card fraud prevention practice in Indonesia are indicated, inter alia, by a lack of reliable fraud data collection, management and distribution mechanisms as well as a lack of effective and efficient identity management practice. Deficiencies and weaknesses in the system should be identified and action taken to make it more consistent with credit card fraud prevention practices of other countries.
Towards a Better Credit Card Fraud Prevention Strategy in Indonesia
Abstract: For years, credit card fraud has been a major problem in the Indonesian payments system. Numerous efforts have been made to mitigate this payment crime. Nevertheless, the high fraud losses recorded in particular by banks and other parties in credit card networks suggests that more actions still need to be taken. For this, formulation of a sound fraud prevention strategy is paramount to the success in combating credit card fraud in a payments system. Such a strategy will ensure that available resources are allocated effectively and efficiently. This article, which is based on the author’s PhD research, seeks to assess the soundness of the credit card fraud prevention strategy in the Indonesian payments system. For analytical purpose, references are made to similar practices in other countries such as the United States, the United Kingdom and Australia. The study was conducted using document review and interviews and was focusing on the period of 2003 through 2007 The discussions in this article conclude that just as in other countries such as the United States, the United Kingdom and Australia, the essentials of credit card fraud prevention practice in the Indonesia comprise six key areas of resource allocation: understanding of the real problems; fraud prevention policy; fraud awareness; technology-based protection, identity management; and legal deterrence. These six key areas are mainly supported by four pillars: user; institution; network; and government and industry. However, credit card fraud prevention practice in Indonesia is still at a lower level of robustness than those in the benchmark countries. Deficiencies in the credit card fraud prevention practice in Indonesia are indicated, inter alia, by a lack of reliable fraud data collection, management and distribution mechanisms as well as a lack of effective and efficient identity management practice. Deficiencies and weaknesses in the system should be identified and action taken to make it more consistent with credit card fraud prevention practices of other countries.