Fraud-Free Finland Eyes Horizon

Finland is virtually free of ATM fraud, though that coveted position is not ensured with the advent of the Single European Payments Act (SEPA) a Finnish expert on bank card crime tells BS&T.

"We have about two ATM skimming cases a year, Germany has 2,000," said Tero Toivonen, detective sergeant with Finland's National Bureau of Investigation. Toivonen, interviewed at the Wincor World user conference in Paderborn, Germany, represents Finland at international fraud conferences.

The potential take from ATM fraud in Finland is reduced by several factors that make it an unappealing target for fraudsters, he said. Finnish ATMs have an unusual design, with two slots, one for a magnetic stripe card, one for a chip card, meaning criminals would need to modify their data capture devices for that type of machine, used by Finland's relatively small population of five million people, rather than the internationally standard single-slot machines.

Importantly, Toivonen says, "More than half of our bank cards work nationally only, which makes them unattractive to criminals." This obstructs the typical pattern of international crime gangs, which is to steal ATM data in relatively wealthy European countries, then clone cards based on that information and withdraw funds in other countries, particularly in Eastern Europe.

However Toivonen says, "When SEPA comes into effect, bank cards must work internationally, so SEPA poses a threat to ATM security. We are ready for that, but still there may be some surprises." SEPA compliant bank card transactions, under which cross-border transactions within the European Union will be treated just like domestic transactions, are expected by or before 2010.

Another reason why Finland has had almost no ATM fraud to date (the country's first skimming case was about to come to trial as we spoke) is its use of chip cards (smart cards), which have been shown to greatly reduce fraud on bank cards.

Also, Toivonen says, "We are a small country so there is close cooperation between the banks, the technology companies and the police." Echoing the comments of another fraud expert at the conference, who spoke on Germany's 70 percent increase in skimming attempts in 2008, Toivonen said, "The police can't do it on their own." Toivonen is in the Criminal Intelligence Division of the Finnish Police.