Credit Card Fraud Down

Sector: Banking & Finance

14th June 2010

Credit card fraud losses fell by 28 per cent to £440 million last year - the first time that card fraud has decreased since 2006. Losses from cheque fraud also fell sharply to just under £30 million, according to figures released today by the UK Cards Association, the industry trade body.

But as security on cards and cheques has been tightened up, criminals have turned their attention instead to online banking, where fraud losses rose by 14 per cent to £59.7 million.

Melanie Johnson, spokeswoman for the UK Cards Association, said the sharp drop in card fraud was due to a combination of measures. These included the widespread adoption of chip and PIN cards and greater use of fraud detection tools by banks and retailers.

Banks and card companies increasingly monitor individuals’ spending patterns, so that an unusual attempted purchase triggers an alert before the fraudulent transaction can be completed. This measure was particularly effective in stopping card fraud abroad, which fell by 47 per cent to £122 million.

sHowever the rise in online banking losses shows that fraudsters are not going away - they are simply seeking out more vulnerable points to attack. The UK Cards Association said the increase was largely due to criminals using more sophisticated techniques to target online banking customers.

They were targeting security weaknesses in customers’ PCs, rather than banks’ own systems, which were more difficult to attack. There was also a 16 per cent increase to 51,000 in recorded incidents of phishing - where fraudsters send fake e-mails posing as financial organisations in order to extract personal details from individuals.

David Cooper, chairman of the Fraud Control Steering Group, the payment industry’s leading fraud prevention group, said: "Although online banking losses have shown a year-on-year increase, card fraud remains a main focus of criminal activity. The industry remains committed to containing and reducing all areas of fraud."

Source: Times Online - Read the full article >