New figures show rise in card fraud

Card fraud rose by a quarter in the past year to account for £535.2m in losses, mainly fuelled by criminals using stolen UK card details overseas.

According to payments association Apacs, which released its 2007 card fraud figures yesterday, a key driver behind the rise is the 77 per cent increase (up by £90.5m) in fraud that is committed overseas by criminals.

Most of this fraud involves criminals stealing card details in the UK to make counterfeit cards for use in countries yet to upgrade to chip and Pin. Fraud abroad now accounts for more than a third (39 per cent) of total card fraud losses.

However the biggest actual losses came from card not present fraud (CNP). The key contributors are phone, internet and mail order fraud, which in 2007 were up by 37 per cent to £290m.

However despite this rise, Apacs remains confident in the benefits of chip and Pin. It said its figures show the system has lowered fraud in face-to-face transactions in the UK by two-thirds in the past three years. This type of card fraud fell from £218.8m in 2004 to £73m last year.

Implementing the technology also means that in 2007, fraud involving lost and stolen cards (£56.2m), and mail non-receipt fraud (£10.2m) are at their lowest levels for 10 years.

The payment association's figures also show a fall in online banking fraud losses, which are down by 33 per cent to £22.6m.

Apacs director of communications Sandra Quinn said: "Although card fraud levels have begun to rise again due to fraud abroad and card-not-present losses, chip and Pin has proven to be an undoubted success in reducing card fraud on the UK high street.

"As more countries follow our lead and upgrade to chip and Pin, the opportunities for criminals to use stolen 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."