According to figures from the Association of Payment Clearing Services (APACS) UK card fraud losses totalled £504.8 million in 2004, up 20pc from 2003.
Card-not-present transactions are those carried out without the physical presence of the card at the point of sale – for example telephone or internet transactions. Card-not-present fraud is still the most common type of fraud, but the number of card-not-present transactions has increased significantly from 2003-2004 and the rise in fraudulent activity (24pc) is in proportion to this.
Fraud on counterfeit cards and lost or stolen cards accounts for almost one half of all card fraud. It is anticipated that chip and PIN will have a major impact on these two areas. Fraud on cards never received by the card-holder (mail non-receipt) rose significantly in 2004; this is thought to be due to the high number of cards sent out in advance of chip and PIN implementation.
ID theft has grown significantly over the past two years but remains a small proportion of overall losses.
The region that saw the greatest rise in fraud was the North West, where it rose by 48pc. Almost all areas saw an increase in credit card fraud. The one area that bucked the trend was Northern Ireland, where it was down by 19pc. Introduction of chip and PIN, now used in most face-to-face credit and debit card transactions in the UK, will provide greater protection from counterfeit (skimmed or cloned) fraud and fraud on lost and stolen cards. For more information visit www.chipandpin.co.uk
To tackle card-not-present fraud on card transactions via the web, phone and mail order an address and security code checking system is available for retailers. The international card schemes MasterCard and Visa have also introduced systems specifically for online transactions. A training pack for CNP merchants is available from www.cardwatch.org.uk as is information and guidance on anti-fraud measures for card-accepting businesses and cardholders.
The UK banking industry has launched www.banksafeonline.org.uk to help online banking users stay safe online. The banking industry paid out more than £16m in rewards to retail staff who retained cards that were being used fraudulently.
A consumer-focused website has been launched at www.identitytheft.org.uk. This site advises the general public how to best protect themselves from the threat of identity theft, advises what to do if you become a victim and explains where to get further help.
