Feeds

UK credit card fraud down 8%

But cardholder-not-present theft on the up

  • alert
  • submit to reddit

Boost IT visibility and business value

UK credit card fraud has fallen for the first time in eight years, thanks mostly to a clampdown on European counterfeiters.

Losses to credit card theft fell 5 per cent to £402.4 million in 2003 (2002: £424.6m), the annual Association for Payment Clearing Services (APACS) survey reveals.

The headline figure hides uneven progress in stamping down on various forms of credit card fraud. Cardholder-not-present fraud (a category which covers e-commerce transactions), for example, increased significantly, and fraud committed within the UK rose slightly.

Snakes and ladders

Counterfeit card fraud saw the largest reduction, down by 28 per cent (£106.7 million in 2003, compared with £148.5 million in 2002). The bulk of this reduction comes from mainland Europe where counterfeit fraud fell £26 million on the previous year.

Fraud on lost and stolen cards also dropped by two per cent (£106.1 million last year compared to £108.3 million in 2002).

APACS said much of this reduction is a result of increased use of "sophisticated fraud intelligence systems" that help to spot fraud more quickly by tracking unusual cardholder spending patterns.

Banks and retailers hope the rollout of chip and PIN - the system to replace signatures with PINs for verifying payments - will further reduce fraud from lost, stolen or counterfeit credit cards.

CNP fraud grows in importance

Cardholder-not-present fraud - which involves Web, phone and mail order transactions - is now the biggest fraud category. This increased six per cent to £116.4m in 2003. Areas which traditionally have involved smaller losses also continued to grow. The largest percentage increase in fraudulent activity was in identity theft which grew 45 per cent to £29.7m, while fraud at UK cash machines grew by a third (34 per cent) to reach £39 million.

Sandra Quinn, APACS director of communications, stressed the importance of reducing cardholder-not-present fraud (CNP) even more important. When credit cards were first introduced it was never thought they would in an environment where neither the card nor the cardholder would be present, she said. "Criminals have used this fact to their advantage primarily by stealing people’s card details through such techniques as skimming or ‘bin raiding’."

The CC industry has launched a number of initiatives designed to tackle clamp down on CNP fraud, for example, rolling out an address and security code checking system to check the validity of online transactions.

Despite high fraudulent losses, the chances of becoming a victim are still low: fraudulent transactions accounted for just 0.13 per cent of UK card transactions last year. ®

Related Stories

Chip and PIN hits 8 million cards
Retailers warned on Chip and PIN
Shoppers warned of £110m card not present fraud
Chip and PIN goes national
Joe Public blames banks for credit card fraud

External Link

APACS’ fraud prevention website is at Cardwatch.org.uk

The Power of One Brief: Top reasons to choose HP BladeSystem

More from The Register

next story
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
Stick a 4K in them: Super high-res TVs are DONE
4,000 pixels is niche now... Don't say we didn't warn you
Philip K Dick 'Nazi alternate reality' story to be made into TV series
Amazon Studios, Ridley Scott firm to produce The Man in the High Castle
Sonos AXES support for Apple's iOS4 and 5
Want to use your iThing? You can't - it's too old
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
You! Pirate! Stop pirating, or we shall admonish you politely. Repeatedly, if necessary
And we shall go about telling people you smell. No, not really
Too many IT conferences to cover? MICROSOFT to the RESCUE!
Yet more word of cuts emerges from Redmond
Joe Average isn't worth $10 a year to Mark Zuckerberg
The Social Network deflates the PC resurgence with mobile-only usage prediction
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Application security programs and practises
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Securing Web Applications Made Simple and Scalable
Learn how automated security testing can provide a simple and scalable way to protect your web applications.