Online card fraud soars

News

Online card fraud soars

Antony Savvas

Although overall card fraud dropped last year, online and foreign card fraud is still rising at a dizzying pace, according to UK payments association Apacs.

Overall, the cost of fraud fell 3% between 2005 and 2006 to £428m, but online banking fraud jumped 44% to £33.5m in 2006.

The introduction of chip and PIN technology has hit the retail fraudsters, though, with shop till fraud plunging by 47% in 2006.

However, criminals are successfully copying the magnetic strip on UK cards, with the aim of cloning them to be used in countries where there is no chip and PIN system in place. This has led to the fraud abroad figure jumping 43%.

So-called card-not-present fraud losses, covering online, phone and mail-order transactions, rose by 16%, and now account for just under 50% of all card fraud losses.

Cheque fraud losses fell from £40.3m in 2005 to £30.6m last year, as customers used fewer cheques and the banks improved their verification processes.

Apacs spokesperson Sandra Quinn said, “These figures clearly show that there is no one-size-fits-all approach to dealing with fraud. 

“Chip and PIN has had a hugely positive effect on fraud losses over the counter in UK shops and stores, but we are seeing more fraud on transactions that do not use chip and PIN – such as over the internet and phone, by mail order and abroad in countries that have not yet fully upgraded to chip and PIN.” 

Comment on this article: computer.weekly@rbi.co.uk

 

Related articles:

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Apacs fraud report


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