UK credit card fraud losses decline
By Cara Henis
The amount of money lost due to fraudulent credit and debit card activity fell by 23 percent in the UK during the first half of 2009 compared to the same time last year.
Card fraud cost UK consumers and banks £233 million this year, down from £304 million, according to Financial Fraud Action UK (FFAUK), a payment services company.
The occurrence of card fraud declined in almost all categories, including internet, phone and mail order transactions, which historically contributed to the most annual losses. The cost of these crimes fell by 18 per cent. However, the most dramatic decline -- a 48 per cent drop -- was in counterfeiting scams. Fraud involving ATM machines, face-to-face transactions and misplaced cards also decreased.
Card identity theft and phishing scams -- which typically involve tricking a consumer into entering personal information and passwords into an illegitimate Web site -- were the only two areas involving card fraud that increased. Card ID theft climbed by 23 per cent while phishing scams rose by 55 per cent.
Despite the moderate decrease in the overall amount of fraud committed using UK-issued cards, scams involving foreign-issued cards in the UK are up by 36 per cent. This leads experts to believe card fraudsters are still active, but setting their sights on new targets.
"Although it's difficult to prove, we think that one of the reasons for this dip in card losses may simply be as a result of fraudsters realising that they can prosper more by targeting foreign-issued cards -- particularly those without chip and PIN protection," said Katy Worobec, head of fraud control at FFAUK, in a press release.
Chip and PIN protection requires a consumer to enter a personal identification number at the end of each transaction. The PIN acts as a password, which means thieves must have access to the number before they can do much damage. The UK initiated efforts to password-protect the country's cards during 2006.
"Chip and PIN has undoubtedly continued to make it more difficult for fraudsters to commit fraud on our cards in the UK," according to the press release.
Published: 9 October 2009
- Financial capability: Managing money and planning ahead – A recent report on financial capability based on six elements shows many Brits need to hone their financial skills. This short series will give tips on how to improve each area ...
- What we buy and how we spend: A decade of change – The Payments Council took a look back on the past decade in a February 2013 report, which found that Brits are splashing out on fun -- and moving toward a cash-free lifestyle ...
- Glimmers of optimism appear among financial gloom – With Christmas debt looming and warnings of a triple-dip recession in the headlines, you might think consumers are feeling pessimistic about their finances. But recent research shows otherwise ...