UK Credit Card Fraud Breaches £500m

30 November -0001

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Credit and debit card fraud rose by over 25% to £505m last year, a bank payment body reports with much of the rise due to an increase in crime involving cards lost or stolen in the post, according to the Association of Payment Clearing Services (Apacs).

Banks are replacing 140 million cards with new chip and pin cards, but Apacs said some of these were falling into the hands of fraudsters, and that internet scams cost UK consumers £12m in 2004.

It is the first time that Apacs has put a figure on the amount of money consumers are losing through so called phishing scams and computer viruses which can capture security details through keystroke logging.

Overall, the biggest types of fraud were 'cardholder not present' fraud and counterfeit cards, which accounted for more than half the total fraud.

CARD FRAUD

• Counterfeit cards £129.7m (up 17%)
• Card stolen or lost £114.4m (up 2%)
• Card not present £150.8m (up 24%)
• Card lost or stolen in the post £72.9m (up 62%)
• ID fraud £36.9m (up 22%)
• Source: Association of Payment Clearing Services (Apacs)

Apacs hope the new technology will cut fraud, chip and pin cards aim to cut fraud by including a smart chip, pioneered in France, which can store more information than the usual magnetic strips, and also by having users verify transactions by keying in a pin number rather than signing a receipt, the French sytsem reduced fraud by 50%

Latest figures show more than 90 million new cards have been sent out, with 50 million more cards due to be sent out later this year.

However, the roll-out of chip and pin seems to have been at least partly responsible for the upturn in fraud during 2004.

Levels Card Fraud

• 2004 card fraud £520.8m
• 2003 £420.4m
• 2002 £424.6m
• Source: Apacs

The cost of crime involving cards lost or stolen in the post increased by 62%, from £45.1m in 2003 to £72.9m in 2004.

There are 100,000 cards a day being sent out through chip and pin roll-out and some of these have inevitably found their way into the hands of the fraudsters, Apacs, told BBC News.

But Apacs card fraud would be much more prevalent if it had not been for the introduction of chip and pin, estimates say that if chip and pin cards had not been rolled fraud would risen to £800m this year.

Apacs is advising cardholders to check their account regularly in order to spot bogus transactions.

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