CNP fraud declines in the UK for the first time

Cardholder not present (CNP) fraud fell for the first time in the UK from January to June this year according to figures from Financial Fraud Action UK.



Cardholder not present (CNP) fraud fell for the first time in the UK from January to June this year according to figures from Financial Fraud Action UK.


The banking industry body formerly known as APACS revealed the amount of CNP frauds, the one-time scourge of the e-tail and mail order channel, fell 18% in the six months to £134m, following a peak in 2008 at £328m.


“Reasons behind this decrease include the increasing use of sophisticated fraud screening detection tools by retailers and banks,” said Katy Worobec, head of fraud control at Financial Fraud Action UK.


It seems widening adoption among retailers and card users of fraud prevention measures MasterCard SecureCode and Verified by Visa is finally paying off despite the lack of high profile campaign to drive take-up, as happened with chip & PIN.


In the summer MicroScope revealed that the Visa Emue card, which comes with a keypad and KLDC screen embedded into it that allows users to generate a one-off pass code, should provide more security for web-based resellers.


The number of attempted CNP frauds at online reseller has gone up 10% in the last year said Nick Glynne, managing director but actual fraud has fallen 40%.


“We are getting better at screening attempted frauds and there has been a wider take-up of 3D transactions like SecureCode and VBV,” he said, but added, “Fraud CNP remains a massive issue for the channel”.


Total credit card fraud in the UK fell 23% to £233m meaning that CNP remains responsible for more than half of the scams. However, Financial Fraud Action UK was at a loss to details the exact reasons for the overall drop in plastic card crimes.


Fraudsters may have realised that they can prosper more by targeting foreign-issued cards said Worobec, “particularly those without chip and PIN protection and which currently have stronger currencies that sterling”.


“The fact that we’ve seen a 36% increase in the first half of this year in the amount of fraud being committed on foreign cards issued here in the UK adds some weight to this theory,” she added.


Other card fraud highlights saw a 23% rise in card ID theft to £23.9m and a 55% year-on-year increase in online banking fraud totalling £39m, due to criminals targeting customers PCs with malware rather than the banks’ own systems.


The increase was not surprising said Neil Morris, CEO of Prevx, “Due to the highly sophisticated and fast-evolving methods of cybercriminals, even the leading anti-malware solutions customers might use will miss nearly 70% of new infections.”


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