Credit card fraud hits record high
Updated on 01 October 2008
A surge in criminal activity abroad helped push fraud losses on UK cards to a record high during the first six months of the year, figures show.
Losses on UK cards totalled £301.7 million during the period, although the rate at which they are increasing eased from 26% for the same period of 2007, according to payments group APACS.
The group blamed the jump on an 11% rise in fraud committed on UK credit and debit cards abroad, as well as an 18% hike in card-not-present fraud, such as buying items over the internet.
Both of these types of fraud by-pass the banks' more secure chip and Pin technology, which makes it more difficult for fraudsters to use stolen or cloned cards in the UK.
But criminals are continuing to create counterfeit cards to use abroad in countries where the system has not yet been introduced, often cloning the card by copying the magnetic strip. As a result fraud losses abroad have surged by 190% during the past three years to sit at £121,2 million - 40% of the total.
Losses from cards used to buy goods and services over the internet reached £161.9 million during the six months, although there is likely to be some overlap between this figure and card fraud abroad.
Sandra Quinn, director of communications at APACS, said: "Criminals continue to target those areas where we do not currently have the security benefits of chip and Pin, causing increases in fraud abroad and phone, internet and mail order shopping fraud. Fraud abroad will be made more difficult for criminals to commit as more countries roll out chip and Pin."
But despite the introduction of chip and Pin in the UK, there was still a jump in losses from face-to-face transactions at UK retailers, with these rising by 26% to £47.4 million, although the figure was still 35% lower than during the first six months of 2005.
On a brighter note, fraud on lost and stolen cards fell by 11% to £27.3 million, its lowest level for 10 years, while counterfeit card fraud rose to £88.1 million, 22% more than during the same period 12 months ago.
The APACS figures also revealed that online banking fraud losses soared by 185% during the six months compared with the same period of 2007, although at a total of £21.4 million they remained relatively low.
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