Card fraud drops as criminals switch to online banking

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Cyber criminals are increasingly turning their attention away from traditional card fraud to focus their efforts on online bank accounts.

The latest figures from the UK Cards Association shows credit and debit card fraud totalled £440 million in 2009 – a drop of 28 per cent from the previous year's figures.

While this marks the first annual decline in card fraud since 2006, it wasn't all good news: online phishing attacks were up by 14 per cent in 2009, suggesting the drop in card fraud was at least partially down to fraudsters shifting their focus.

It nonetheless represents good news for the UK Cards Association, with the organisation saying its ongoing efforts to keep the public safe from cyber criminals were bearing fruit.

“The cards industry sees fighting fraud as a key part of keeping its customers' interests centre-stage,” said UK Cards Association chair Melanie Johnson. “We are committed to a wide range of measures to ensure customers feel confident, safe and secure when they use their credit and debit cards – whether in a shop, abroad, online, at a cash machine or anywhere else.

The organisation said there was no single reason behind the drop in card fraud, but rather that it was the result of a range of initiatives. It highlighted chip and PIN technology as having helped fraud on lost and stolen cards drop to its lowest level for two decades, and praised retailers and credit card companies for having beefed up their security checks, including the MasterCard SecureCode and Verified by Visa systems designed to make online shopping safer.

“A fall in card fraud is good news for everyone – UK consumers, retailers and the industry. We recognise that cards will always be targeted by criminals, so we are determined not only to continue to prevent, detect and deter those who are behind this type of crime, but also to make sure that innocent victims don't lose out,” Johnson said.

Increased levels of security for online card payments saw card-not-present fraud drop 19 per cent, while fraud on UK cards used abroad fell by an impressive 47 per cent to £122.7 million, the result of more effective fraud detection systems, which monitor card use for unusual spending patterns.

However, online banking fraud continues to rise, including phishing scams to lure people into revealing their personal details through dummy websites or keylogging malware. Online banking losses reaching £59.7 million last year, a 14 per cent rise on 2008.

David Cooper, chairman of the Fraud Control Steering Group, said it would continue in its efforts to protect consumers from all types of fraud.

“Although online banking fraud losses have shown a year-on-year increase, card fraud remains a main focus of criminal activity,” Cooper said. “However, the industry remains committed to containing and reducing all areas of fraud. To this end, we will continue our partnership approach – working with law enforcement, retailers, consumers and the Home Office – to tackle fraud head-on.”

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