Le Thanh Ha of the Bank Card Association (BCA) 's Vietnam Bank Card risk Management Subcommittee told Lao Dong (Labour) newspaper that the number of frauds had soared since early this year while the value of illegal transactions rose from $1 million in the first quarter to $1.5 million in the second.

The amount in the same period last year had been just a third, he said.

A report on fraudulent transactions by Visacard said for every $100 paid in the first quarter of 2011, 16.5 cent had been illegal, and the ratio rose to 42.1 cent in the second quarter.

The BCA said the figure was nearly five times the world rate, and 17 times the region's.

One of the most common forms of fraud in Vietnam is through the use of forged cards and tSTC altered with illegally obtained payment card account data, something contrary to global trends, Ha said.

Around 350 counterfeit cards were used in the country for these illegal transactions, with the BCA saying most were purportedly issued by banks abroad.

The main victims of the frauds were merchants accepting cards, especially in the gold, precious-stone, and electronics businesses and airlines and their agents.

Recently the BCA, working with the police, discovered three groups of criminals using counterfeit payment cards at merchants' in Hanoi and HCM City, and seized 100 fake cards.

Ha admitted that Vietnam is at high risk, particularly from fakes, since it has many shortcomings that card criminals take advantage of.

Both card technology and the number of specialists in card services technology remain limited, he said.

Worse still, many card issuers are busy undercutting each other, making it hard for them to cooperate to mitigate risks by setting up a common warning system and sharing information and experience, he said.

BCA chairwoman Nguyen Thu Ha urged Vietnamese members of international card organisations to sit together and discuss ways to prevent international card scams.

Domestic banks and members bear the brunt of the card frauds.

Some of the members could also be penalised by being placed under inspection by international card organisations or even having their membership cancelled.

Vietnam Investment Review - December 26, 2011