Debit and credit card fraud abroad drives 25% rise in losses

14 March 2008 / by Rachael Stiles
Debit and credit card fraud has been pushed up 25 per cent following a two year fall in losses as a result of foreign scams, APACS has found.

Research from the UK payments association has revealed that a 77 per cent rise of £90.5 million in fraud outside of the UK over the last year has contributed to losses rising by a quarter, as more credit card details are stolen by fraudsters for use in countries which have not yet upgraded to the more secure Chip and PIN system.

Fraud abroad currently accounts for more than one third of total credit and debit card fraud losses.

Fraud losses in the UK continue to remain controlled since the implementation of Chip and PIN, and APACS is urging other countries to follow suit in order to protect credit card customers from identity fraud.

Online banking fraud losses have experienced a heartening drop of 33 per cent, to £22.6 million thanks largely to increased security technology implemented by the banks to protect their customers.

The figures also revealed that from 2006-2007, phone, internet and mail order fraud, where the card is not present, rose by 37 per cent to £290.5 million; counterfeit fraud, where the card has been skimmed or cloned rose 46 per cent to £144.3 million; lost or stolen cards dropped 18 per cent to £56.2 million; card ID theft went up seven per cent to £34.1 million, and fraud as a result of non-receipt of mail dropped 34 per cent to £10.2 million.

In total, domestic fraud rose by six per cent, a considerably lower figure than the 77 per cent rise found in fraud abroad. It is hopes that the implementation of the Chip and Pin system by the European Union will help to significantly reduce fraud abroad and meet banking industry targets by 2010.

Sandra Quinn, director of communications at APACS, commented on the findings: "Although card fraud levels have now begun to go up again due to fraud abroad and card-not-present fraud losses, chip and PIN has proven to be an undoubted success in reducing card fraud on the UK high street.

"And, as more countries follow our lead and upgrade to chip and PIN, the opportunities for criminals to use our stolen magnetic stripe details overseas will decrease."

"The banking industry continues to work with law enforcement, the retail sector, the Home Office and organisations such as the charity Crimestoppers to identify ways of actively protecting against all types of banking fraud.

"This reflects the multi-layered approach needed – an approach that has recently seen the creation of the Payments Industry and Police Joint Intelligence Unit – a vital addition to the UK’s fraud-fighting arsenal."

Meanwhile, Research by CIFAS, the UK's Fraud Prevention Service, has found that more people are lying on application forms to obtain credit, insurance and other products, and that individuals are turning to this earlier and younger than ever before.

CIFAS Head of Communications, Kate Beddington-Brown, said that the research "reveals some deep seated socio-economic problems. With the increasing number of people lying to hide a poor credit history, and the fact that the age of application fraudsters is decreasing year on year, it is clear that people are getting into financial difficulties and turning to fraud earlier."

© Fair Investment Company Ltd