Credit card fraud down by 28%

Total fraud losses on UK debit and credit cards fell for the first time since 2006, dropping 28 per cent, or £170m, to £440.3m in 2009, according to the UK Cards Association.

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

Lost and stolen card fraud fell by 58 per cent from 2004 to 2009 and is now at its lowest level for two decades. Losses at UK retailer level fell by 67 per cent and mail non-receipt fraud dropped 91 per cent since 2004. Counterfeit card fraud losses also fell to their lowest levels since 1999.

However, 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 £59.7m in 2009.

Criminals are using more sophisticated methods to target online banking customers through malware, which targets vulnerabilities in customers’ PCs, rather than the bank’s own systems which are more difficult to attack. There were also more than 51,000 phishing incidents recorded during 2009 – a 16 per cent increase from 2008.

“We live in a digital age and consumers need to be more vigilant about disclosing their personal information on social networking sites,” said Rumina Hassam, personal finance expert at uSwitch.com.

“Many consumers will also at some point have received an alarming email, known as ‘phishing’, asking them to divulge banking or card information, usually under the premise that there is some sort of problem with their account. Consumers must not click on the links and should take steps to ensure they use anti-virus software and a firewall for added protection.”

Help and advice on preventing all types of online banking fraud is available at www.banksafeonline.org.uk.
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