Card fraud levels ‘lowest in a decade’

According to the banking industry, card fraud losses were at their lowest level for 10 years for the first half of 2010, at just £187m.

The UK Cards Association said that online banking fraud was down 36% compared to the same period last year, at £25m.

And despite telephone banking fraud being up 9% to £6m, cheque fraud losses fell by 13% to £14m.

These half-year figures follow the 2009 figures which saw a 28% drop in reported credit card fraud, which marked the most significant annual fall since statistics first started being published in 1999.

Melanie Johnson of the UK Cards Association said: “These figures are testament to the importance that the UK’s card companies place on driving down card fraud losses and reducing any inconvenience to customers”.

The huge rise in card use, together with the growth of telephone and internet banking over the past 10 years have given fraudsters more and more opportunity to work.

Between 1999 and 2009, the UK banking industry and retailers lost a reported £4.7bn to card fraud, which includes debit cards, credit cards and store cards.

But you will be pleased to learn that security measures promoted by the industry have been having some effect.

Chip-and-pin technology is now being used both in the UK and abroad and banks are heightening online verification security by adding software that requests secret passwords when using plastic cards to shop online.

The UK Cards Association also added that card fraud abroad has halved in the past two years.

“One of the factors causing this is the fraud detection systems used by the banks and card companies, which monitor for unusual spending – meaning that potential fraud is stopped before it happens,” it said.

“The increasing rollout of chip-and-pin in more and more countries around the world also makes it harder for criminals to commit counterfeit card fraud.”

There are several ways in which card fraud can take place, such as card details being stolen and used to pay for things by phone, online and by mail order, or the use of fake cards, all of which continue to thrive, produceing significant losses to banks and retailers.

Card losses peaked in 2008 at £610m, but have since been falling.

However, the number of reported phishing attacks, where victims are sent fraudulent emails that appear to be a trusted bank or company, in an attempt to trick them into revealing their bank account details, are on the rise, with over 31,000 reported cases in the first half of 2010 alone.

Cheque fraud has been falling, but this is hardly surprising as the use of cheques is rapidly falling.

“The overwhelming majority of attempted cheque fraud gets stopped before the cheque is paid,” the UK Cards Association said.

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