Apacs releases fraud figures for 2008

The latest figures from Apacs reveal a shocking rise in fraud in 2008.

The UK payments association said total losses now stand at £609m, with the biggest rise hitting online banking; losses were up by 132 per cent in 2008, from £22.6m in 2007 to £52.5m.

Andrew Goodwill, who founded the Early Warning fraud alert company bought by The 3rd Man Group, said: " This shows that phishing email attacks are still working and it also highlights the problem of people not adequately updating their security software. Things are going to get worse with the recession."

Credit cards have also been badly hit, with card not present (CNP) fraud now accounting for 54 per cent of all card fraud. CNP fraud is where criminals order goods over the phone, internet or mail order using stolen credit card details. Losses of this type rose by 13 per cent on last year and now stand at £328.4m, up from £290.7m.

Card identity theft was up by 39 per cent from £34m in 2007 to £47.4m. With this fraud criminals essentially hijack a person's debit or credit card account by getting the bank to send them a genuine replacement card and PIN number, for example.

Although criminals only have a short time in which to use the cards before the real account owner discovers the abuse, Apacs said it was one of the major factors contributing to fraudulent transactions in UK shops, which rose by 35 per cent from £73m to £98.5m.

Cloned card fraud was up by 18 per cent from £144.3m in 2007 to £169m last year. The only bright spot was that fraud carried out by criminals using stolen or lost cards was down by four per cent to £54.1m from £56.2m in 2007.

Apacs tried to put a positive spin on the problem, saying the losses had to be taken into context. It said online shopping has increased by 524 per cent (up from £6.6bn in 2001 to £41.2bn in 2008) and the losses as a percentage of plastic card turnover were less than in 2004.

However Jennifer Perry, co-founder of the E-Victims organisation, which runs a website that gives advice to victims of online crimes, said: "I believe the losses are far higher than have been reported because we know that banks have been intimidating some people in order not to pay out.

"Banks should be far more proactive in educating their customers about online fraud but they are afraid of alarming their customers. These figures show that they need to do more. If they don't, the UK is likely to follow the US, where people have increasingly moved away from using online banking because they have lost confidence."