Fraud scam sparks growing recall of German credit cards
A massive fraud ring in Spain has sparked a growing recall of German credit cards, with customers of nearly all banks in the country affected. Some 100,000 cards been affected so far.
According to Wednesday’s edition of the Financial Times Deutschland, the Volksbank and Raiffeisenbank have decided to take more than 60,000 Visa and Mastercards out of circulation.
That brings the total number of credit cards recalled in Germany in recent weeks to more than 100,000. In October, retailer KarstadtQuelle replaced more than 15,000 customer credit cards while the German subsidiary of Barclay’s also recalled thousands. Commerzbank and Deutsche Bank also froze hundreds of credit cards as a precautionary matter.
At the weekend, German airliner Lufthansa announced it was replacing thousands of its “Miles & More” cards issued by the Deutsche Kreditbank after it was found many of the cards were used in Spain. However, so far there have been no cases of fraud discovered with the cards that can be used to collect frequent flyer miles with the airline.
The problems all stem from a payment processing centre in Spain. Credit companies Visa and Mastercard warned banks about four weeks ago when inconsistencies appeared on monthly statements.
A Mastercard spokesman on Monday said there was good reason to suspect it was systematic fraud within the company in Spain rather than individual cases of “skimming,” where fraudsters use sophisticated card readers to collect credit card details from cash machines.
The Financial Times Deutschland also warned that the fraud isn’t just affecting German bank-issued cards, but also credit cards used in Germany if the local partner uses the same Spanish payment processing company.