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Fraud abroad drives up card fraud losses

Edited by the Insidemoneytalk editorial team Oct 5, 2007

Plastic card fraud up 26% in first six months of 2007

Card fraud abroad doubles, yet UK domestic card fraud down 4% Online banking fraud losses down by 67% Figures released today (3 October 2007) by APACS, the UK payments association, show that total card fraud losses increased by 26 per cent in the six months to June 2007 compared with the first half of 2006.

This increase has been driven by a 126 per cent rise in fraud on UK-issued cards being used overseas.

In contrast, domestic card fraud continues to fall thanks to chip and PIN, with losses at UK retailers down 11 per cent and losses at UK cash machines down 57 per cent.

Mike Naylor, Personal Finance Expert at uSwitch.com, said: "Chip and PIN has clearly been a success in the UK with an 11% decline in card fraud at UK retailers and a 57% drop in fraud at UK cash machines.

However, it is disappointing for all parties involved that fraudsters have found another loophole in the system by using counterfeit cards abroad.

If this type of fraud continues to grow at this rate, we can expect losses to increase dramatically by 2010.

This is when European Banks should finally catch up with the UK's chip and PIN technology which should hopefully eliminate the problem.

"All banks in the UK have systems in place to spot unusual activity on customers' accounts and, generally speaking, they will repay money lost through fraud.

However, we can't ignore the fact that ultimately consumers pick up the bill for fraud, albeit indirectly.

Banks have to set aside money for these losses and much of this will be taken out of the fees and charges already in place.

Going forward, the solution is completely out of the hands of the consumer but simple rules can be followed to minimise opportunities for fraudsters.

These include; covering your PIN at cash machines and shops, shredding letters and statements before putting them in the bin, closing down dormant accounts and making sure that financial providers have your correct address and personal details.".