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Plastic card fraud falls by 23% Plastic card fraud falls by 23%
(about 2 hours later)
The amount of fraud being committed on plastic cards fell in the first half of the year, according to industry body Financial Fraud Action UK. The amount of fraud being committed on plastic cards across the country fell in the first half of the year, industry body Financial Fraud Action UK says.
Losses totalled £233m in the first six months of 2009 - down by 23% on both the first and second halves of last year. Losses totalled £233m in the six months - down by 23% on both the first and second halves of last year.
Frauds perpetrated over the phone, internet, or by mail order dropped for the first time ever. Fraudsters may have turned to targeting foreign-issued cards, experts believe.
But there was a big jump in online banking fraud. Phone, internet and mail order fraud levels all dropped for the first time, but online banking fraud losses rose to £39m, up 55% on the first half of 2008.
"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," said Katy Worobec, head of Fraud Control."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," said Katy Worobec, head of Fraud Control.
"Particularly those without chip-and-pin protection and which currently have stronger currencies than sterling."Particularly those without chip-and-pin protection and which currently have stronger currencies than sterling.
"The fact that we've seen a 36% increase in the first half of this year in the amount of fraud being committed on foreign-issued cards here in the UK adds some weight to this theory," she added."The fact that we've seen a 36% increase in the first half of this year in the amount of fraud being committed on foreign-issued cards here in the UK adds some weight to this theory," she added.
'More sophisticated''More sophisticated'
Chip-and-pin cards were introduced by the UK banking industry in 2004. Total card fraud fell in the two years that followed.Chip-and-pin cards were introduced by the UK banking industry in 2004. Total card fraud fell in the two years that followed.
CARD FRAUD, FIRST HALF 2009 Card not present - £134m (down 18% on first half 2008)Counterfeit cards - £46.3m (down 48%)Lost or stolen cards - £25.1m (down 6%)Card ID theft - £23.9m (up 23%)Card lost in post - £3.5m (down 33%)Total - £232.8m (down 23%) Source: Financial Fraud Action UKCARD FRAUD, FIRST HALF 2009 Card not present - £134m (down 18% on first half 2008)Counterfeit cards - £46.3m (down 48%)Lost or stolen cards - £25.1m (down 6%)Card ID theft - £23.9m (up 23%)Card lost in post - £3.5m (down 33%)Total - £232.8m (down 23%) Source: Financial Fraud Action UK
Losses then rose in 2007 and 2008 to hit a new annual record last year of £610m.Losses then rose in 2007 and 2008 to hit a new annual record last year of £610m.
Now it seems the problem may be coming under control again.Now it seems the problem may be coming under control again.
One reason for finally reducing fraud when cards are used to buy things over the phone, internet or mail order - known in the industry as "card not present" fraud - has been the introduction of online payment tools, such as Mastercard Secure Code and Verified by Visa, which ask the card owner to type in a second pin code at the point of purchase.One reason for finally reducing fraud when cards are used to buy things over the phone, internet or mail order - known in the industry as "card not present" fraud - has been the introduction of online payment tools, such as Mastercard Secure Code and Verified by Visa, which ask the card owner to type in a second pin code at the point of purchase.
The value of successful frauds also dropped with counterfeit cards, and ones which had been lost or stolen, or where cards had been lost in the post.The value of successful frauds also dropped with counterfeit cards, and ones which had been lost or stolen, or where cards had been lost in the post.
The biggest area of rising fraud occurred in online banking, where losses rose to £39m in the first six months of the year, up 55% on the first half of last year. The biggest area of rising fraud occurred in online banking.
"The increase is largely due to criminals employing more sophisticated methods to target online banking customers through malware scams - which target vulnerabilities in customers' PCs - rather than the banks' own systems which have proved more difficult for the fraudsters to attack," said Financial Fraud Action UK."The increase is largely due to criminals employing more sophisticated methods to target online banking customers through malware scams - which target vulnerabilities in customers' PCs - rather than the banks' own systems which have proved more difficult for the fraudsters to attack," said Financial Fraud Action UK.