Credit card fraud in Russia 10-times less than elsewhere

(Business New Europe – bne.eu – July 25, 2013) Despite its image as a den of high tech thieves international credit card company VISA reports that fraud in Russia is 10-times less than in its other markets.

The company said that card fraud in Russia costs it 5 kopecks per 1,000 annually, a tenth of the company’s global average, VISA said.

“The level of fraud with Visa cards in the world is falling constantly. Now we are at a historical minimum in this areaThe number of real fraudulent cases was reduced by two thirds over the last two decades,” Oleg Skorodumov, director of Visa’s risk management department in Russia, CIS, and South East Europe, told reporters on Wednesday.

Russia has 100 million Visa cards in circulation. In 2012, the turnover on Visa cards, issued by Russian banks, rose 28% to RUB13 trillion.

Fraud may not be a problem in Russia, but getting people to pay off their debt is.

The volume of bad loans amongst Russian credit cards snowballed in the first quarter of this year, according to the National Credit History Bureau (NBKI).

Late payments on credit card debt was up by nearly a quarter (24.8%) over the first three months of this year to a sector total of RUB49.3bn.

Credit cards are amongst the most abused of financial consumer products while late payments on mortgage and auto loans are falling, down by 9.4% and 2.7% respectively over the first quarter.

Experts explain the deterioration of card loans by the aggressive promotion of such loans by banks, including to not quite financially sophisticated borrowers.