Credit Card News Credit Card Fraud Reaches Record High 2301

Credit card fraud reaches record high

03 October 2008 / by Rachael Stiles
Credit card fraud has hit a record high, with figures illustrating that it has gotten worse since the introduction of the chip and pin system.

Despite efforts to combat credit card and debit card fraud, there has been a 14 per cent increase in the number of incidents of fraud, according to new figures from the Association of Payment Clearing Services (APACS).

Fraud losses using UK cards reached a record £301.7million in the first six months of this year, 40 per cent of which involved cases where cloned cards were used to withdraw money abroad. APACS blames the 11 per cent increase in fraud committed using British credit and debit cards outside the UK as the main culprit for the rise.

There was an 18 per cent increase in cases of card-not-present fraud, such as using stolen cards for internet purchases. Losses from fraudulent online purchases reached £161.9million during the six month period.

While the chip and pin system has made it more difficult for fraudsters to use stolen credit cards in the UK, criminals operating online or in countries that do not have the technology in place can by-pass this system.

Fraud losses abroad have surged by 190 per cent in the last three years as criminals have continued to create counterfeit cards to steal a total of £121.2million.

“Criminals continue to target those areas where we do not currently have the security benefits of chip and Pin, causing increases in fraud abroad and phone, internet and mail order shopping fraud.” said Sandra Quinn, director of communications at APACS. “Fraud abroad will be made more difficult for criminals to commit as more countries roll out chip and Pin.”

But even in the UK, where chip and pin technology has been in place since 2004, the first two quarters of 2008 still saw a 26 per cent rise in losses from face-to-face transactions, where it takes place at a UK retailer.

The new figures also revealed that losses from online banking fraud also soared, by 185 per cent compared to the same period in 2007, to a total of £21.4million.

© Fair Investment Company Ltd

Written by Editorial Team