Despite recent efforts to clamp down on electronic payments fraud, the crime is still rife and is undermining citizens' confidence in buying and selling over the internet, the European Commission said Monday.

A Commission report on fraud and countermeasures taken between 2004 and 2007 shows that even though the number of discovered cases is a small minority of the overall number of transactions using new payment services, they undermine the general level of confidence among citizens in the European Union.

In addition, electronic payment fraud is increasingly moving to non-face-to-face situations such as Internet payments, the report said.

"Payment fraud is a moving target and, inevitably, new threats appear, such as identity theft/fraud and, more generally, cyber crime. In 2007, the Commission announced its policy objectives regarding cyber crime and will continue to closely monitor developments in this area," the Commission said.

Two recent pieces of EU legislation have tried to tackle the issue: a payment services directive and a money laundering directive. The money laundering law includes a "know your customer" rule for electronic transactions, but the Commission now believes more work is needed to raise citizens' awareness of the dangers.

"The Commission is working actively to minimize the payment fraud threat, for the benefit of consumers and financial services providers alike," said Charlie McCreevy, Commissioner for the EU internal market.

Action now being planned includes running awareness campaigns targeting the general public in the EU. These could include running conferences about the dangers of electronic payments, the Commission said.

The IDG News Service is a Network World affiliate.

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