Credit-card fraud is soaring in Russia as criminal elements, often working in cahoots with corrupt banking officials, take advantage of modern technology and weak enforcement to bilk financial institutions, according to a number of experts.


Alexander Khavronichev, chief detective of the credit-card fraud branch of the Moscow police, said Wednesday at a conference devoted to the subject that fraud is growing faster than the spread of "plastic" in Russia.


Last year losses on all cards amounted to $100,000, said Mikhail Goryainov, deputy security head of United Card Service, which handles 80 percent of credit-card transactions in Russia. He called such cheating "a really alarming problem."


Fraudulent transactions using Visa cards alone caused losses of $79,302 during the first three months of this year, according to the Rekon financial consultancy.


Yet, some experts say, losses are far bigger than to be identified said police are investigating a gang that is believed to have defrauded a number of Moscow banks of $300,000 over a two-week period recently. He declined to give details.


Igor Borisov, a vice president of the Business and Personal Security Association, said up to 80 percent of all credit-card fraud in Russia happens with the direct involvement of bank personnel.


"There is lack of control in the banks. Too many people have access to information concerning the cards," he said, adding that "those involved on the bank side receive 3 percent to 5 percent of the stolen amount."


Credit-card fraud is relatively new to Russia but has been familiar worldwide for years. According to Boris Skorodumov, an expert with the Center of Modern Computer Technologies, overall global credit-card losses amounted to about $600 million last year.


Almost 100 fake plastic cards have been confiscated in Moscow so far this year, Goryainov said. In one typical case the credit-card number of a senior Dutch diplomat was copied at a Moscow hotel and then sold to criminals. According to Goryainov, criminals made a fake plastic card that carried a Russian name but the number of the diplomat.


"They used this card at several Moscow stores before the card was confiscated," Goryainov said.


He said cashiers receive $50 for every fake card they confiscate and many times more if they help detain a fraudster, but it is still difficult to catch illegal users of cards. "These people work in groups. They can smell danger, and run away promptly. Also, many cashiers are young inexperienced girls who are simply afraid to do anything in an ambiguous situation."


But even if a person is caught, it is very difficult to convict him. The term "credit-card fraud" does not exist in the Russian criminal code.


"Very often police have to let a criminal go because there is no legal basis by which to arrest him," said Sergei Barancheyev, head of the Cardcenter, a processing company founded by 29 Russian commercial banks. "Our parliament has to fix this ridiculous situation."


"In many cases Russian criminals outsmart their foreign colleagues," said Khavronichev. "They fake the card slips, they fake the cards, they do everything you can imagine to steal money." Goryainov said counterfeiting of cards is becoming the major scam, supplanting the use of stolen or lost cards to defraud individuals and financial institutions.


"A counterfeit card looks almost like a real one," he said. "And it works exactly the same." Modern technology allows swindlers to produce holograms and fake magnetic strips that work like real ones. Swindlers even make fake identification to use with the card.


Goryainov said the amount of credit-card fraud decreases considerably when processing companies and banks take special measures to fight back.


"You can see a trend -- when we take certain measures, the fraud declines. Then nothing happens for some time, and later criminals again find new methods and we have to come up with new measures ourselves."


In 1994, United Card Service created a special security system that brought about a decrease in fraud from 0.33 percent of all operations to 0.21 percent, Goryainov said. However, fraud is back up again this year, Borisov said.


"Our actions are always running behind their counteractions," he said. "Instead of preventing fraud we are following the fraudsters."


Barancheyev said credit-card fraud can only be defeated through united measures taken by banks, processing companies and the police.


He suggested that on-line and telephone authorization with the card issuers should become standard procedure for all merchants carrying out credit-card transactions.


"Authorization prevents a lot of fraud. When Visa International increased authorization from 12 to 30 percent in 1994, fraud fell by 75 percent," Barancheyev said. He added that most Russian merchants do not seek authorization for charges below $100.


Specialists agree that banks have to create a common databank of credit histories, both for individuals and for businesses. According to Borisov, currently Russian banks conceal information from each other, including information about potential fraudsters and bad credit histories.


"They always say it's a commercial secret," said Borisov. "What they need to do instead is to sponsor credit bureaus and exchange information about their customers' credit histories" and lobby for tougher legislation on economic crime, he said.