Fraud abroad has pushed up losses on UK credit and debit cards following a two year fall, according to the latest stats from UK payments association APACS.
Card fraud losses last year rose 25 per cent from £427m in 2006 to reach a total of £535.2m last year, an increase mainly explained by a £90.5m rise in fraud overseas by criminals using stolen UK card details.
International fraud losses rose from £117.1m in 2006 to £207.6m in 2007. The majority of these losses came from countries yet to upgrade to chip and PIN. Fraud abroad now accounts for more than one third (39 per cent) of total card fraud losses. UK cash machine fraud almost halved from £62m in 2006 to £35m last year.
Card-not-present (CNP) fraud (a category that covers ecommerce and mail order transactions) also rose from £212.7m in 2006 to £290.5m in 2007, an increase of £77.8m (or 37 per cent). APACS said these figures ought to be viewed in the context of a huge rise in ecommerce spending. APACS vowed to further prioritise the fight against CNP fraud this year.
Cheque fraud losses in 2007 rose 10 per cent to £33.5m, after two years on the decline.
By contrast, online banking fraud losses fell a third to £22.6m, but card ID theft rose from £31.9m in 2006 to £34.1m in 2007. APACS said this fall is particularly impressive given that the volume of phishing incidents doubled last year. Advice on defending against phishing attacks can be found here.
APACS said Chip and PIN had a "hugely positive" effect on card fraud committed in the UK. Over the past three years (a period that covers the phased introduction of Chip and PIN), losses on face-to-face transactions on the UK high street fell by two-thirds from £218.8m in 2004, to £73m last year. Last year's figures also show that fraud on lost and stolen cards (£56.2m), and mail non-receipt fraud (£10.2m), are at their lowest levels for 10 years.
Counterfeit fraud losses have increased by 46 per cent, but the vast majority of this fraud is due to criminals stealing card details in the UK to make counterfeit magnetic stripe cards for use in countries yet to upgrade to chip and PIN, according to APACS. The UK banking industry hopes this type of fraud will become more difficult when the European banking industry meets its target to complete its chip card rollout by 2010.
"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," said Sandra Quinn, director of communications at APACS.
Earlier this week a joint payment industry and police intelligence unit was established to fight all forms of banking fraud. The new Payments Industry and Police Joint Intelligence Unit (PIPJIU) aims to enhance the work of the Dedicated Cheque and Plastic Crime Unit (DCPCU), the specialist police unit fully sponsored by the banking industry. ®