Th EU Data Protection: new guidelines on payment card fraud prevention databases

The EU Committee of Data Protection Authorities (“Article 29 Working Party”) has endorsed guidelines on the collection and processing of data on merchants whose contracts to accept payment cards have been terminated. The guidelines will help banks prevent fraud and ensure that merchants’ privacy is better protected. Databases on "terminated" merchants are very important for the banking industry. In the UK, one of the EU countries where the operation of these databases does not pose any legal problems, substantial fraud savings have been made. Their use across Europe could potentially generate savings of € 200 million.

The guidelines will be implemented by Visa and MasterCard in 2005 and that implementation will be reviewed by the Article 29 Working Party in early 2006