Card fraud abroad up claims APACS

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APACS today released its full-year figures for UK credit card fraud during 2007, which showed losses are up due to overseas fraud following a two-year fall.

The payment industry body revealed card fraud losses were up by 25 per cent last year, driven by a 70 per cent, £90.5-million increase in fraud abroad as more UK card details are stolen for use in countries yet to upgrade to chip and PIN-standard payment authentication systems.

As a result, it said total card fraud losses last year rose by 25 per cent to £535.2 million, breaking two consecutive, previous years' of reductions. What's more, fraud abroad now accounts for more than one third (39 per cent) of total card fraud losses.

On the domestic front, APACS said online banking fraud losses were down 33 per cent to £22.6 million, despite the fact that phishing incidents shot from 14,156 in 2006 to 25,796 last year.

Chip and PIN has continued to have a positive effect on card fraud committed in the UK. Over the past three years, losses on face-to-face transactions on the UK High Street fell by two-thirds from £218.8 million in 2004, to £73.0 million last year. And fraud on lost and stolen cards (£56.2 million), and mail/non-receipt fraud (£10.2 million), were at their lowest levels for 10 years.

Counterfeit fraud losses did increase by 46 per cent in 2007, but APACS said the vast majority of this fraud is due to criminals stealing UK card details to make counterfeit magnetic stripe cards for use in countries yet to upgrade to chip and PIN.

"This type of fraud will also become more difficult when the European banking industry meets its target to complete its chip card rollout by 2010," APACS said in its report.

Card-not-present (CNP) fraud losses increased by 37 per cent to account for more than half of all card fraud. But APACS said these losses have to be seen in the context of huge increases in the amount of people shopping online: from 2001 to 2006 CNP fraud losses rose by 122 per cent, while the total value of online shopping transactions alone increased by 358 per cent (£6.6 billion in 2001 to £30.2 billion in 2006) over the same time period.

Sandra Quinn, APACS director of communications, added: "Although card fraud levels have now begun to go up again due to fraud abroad and card-not-present fraud losses, chip and PIN has proven to be an undoubted success in reducing card fraud on the UK High Street.

"And, as more countries follow our lead and upgrade to chip and PIN, the opportunities for criminals to use our stolen magnetic stripe details overseas will decrease."

Quinn also highlighted the launch of the new Payments Industry and Police Joint Intelligence Unit (PIPJIU), announced on Monday, to enhance the work of the APACS' sponsored, specialist police Dedicated Cheque and Plastic Crime Unit (DCPCU). The PIPJIU's aim is to improve the quality and scope of industry intelligence the DCPCU can access, increasing the operational effectiveness of the unit.

In addition, following significant year-on-year reductions in 2005 and 2006, cheque fraud losses in 2007 rose 10 per cent to £33.5m. However, APACS added that these losses still remain relatively low compared with other fraud types.

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