Results show that a five per cent decrease in British credit card fraud saw theft losses drop to £402.4 million in 2003.

The study by the Association for Payment Clearing Services (APACS) suggests the results are due to tougher action on credit card fraud such as “sophisticated fraud intelligence systems”.

Most significant drops were seen in counterfeit card fraud (down 28 per cent) and lost and stolen card fraud (down two per cent).

However cardholder-not-present fraud increased (up six per cent) along with UK cash machine fraud (34 per cent). Banks are hoping that new schemes such as chip and pin will help lower levels of fraud even further.

Sandra Quinn, APACS director of communications told The Register: “When credit cards were first introduced it was never thought they would be used in an environment where neither the card nor the cardholder would be present. Criminals have used this fact to their advantage primarily by stealing people’s card details through techniques.”

However, the chance of being a victim of credit card fraud is reportedly still low with just 0.13 per cent of UK card transactions being fraudulent last year.