According to the Association of Payment Clearing Services (Apacs), credit card fraud losses fell by more than five per cent in 2003 to £402.4 million, with an even bigger fall expected once chip and pin is fully rolled out.

Karina Purang, financial analyst at Datamonitor, believes that the new technology is playing a key role in helping to drive down fraud.

“The efforts spent by the various players in preventing card fraud have finally paid off,” she said.

“Neural network systems have become standard across the card industry to detect unusual spending patterns and a number of bodies, such as the dedicated cheque and plastic crime unit, have been established to combat card fraud.”

However, Apacs has also warned that fraudsters may now be moving their attentions elsewhere.

In the last twelve months, fraud losses resulting from identity theft rose by 44 per cent to reach £29.7 million.
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