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UK banking fraud losses rise to £301.7m

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UK banking losses due to fraud in the first half of 2008 hit £301.7m compared to £263.6m in the same period last year, according to the latest figures from UK banking association APACS.

Fraud abroad made up 40 per cent of total card fraud losses reaching £121.2m in the period, up 11 per cent of the £108.8m lost last year. That loss was through tactics such as the use of counterfeit plastic cards with stolen PINs on machines overseas that only check magnetic strips, not chips.

Once the European banking industry meets its target on the roll-out of plastic cards and readers that rely on chip-based technology - due to be completed by 2010 - this type of fast-growing scam will be contained, APACS predicts.

Card-not-present fraud (a category that includes ecommerce fraud as well as phone and mail order scams) also rose 18 per cent to reach £161.9m for the first six months of 2008, according to APACS stats published on Wednesday. This type of fraud has trebled - up 207 per cent - since 2001 but over the same six month period ecommerce transactions increased 415 per cent; so these particular figures, although hardly encouraging, are not quite as bad as they might first appear.

Online banking fraud losses reached £21.4m during the six months to June, a huge 185 per cent rise on the 2007 figure. The increasing losses buck a recent trend and are largely blamed on phishing and spyware scams.

More than 20,000 fraudulent phishing websites were established in the first six months of 2008, an increase of more than 180 per cent from the same period last year. Top tips on fighting online banking fraud can be found at banksafeonline.org.uk.

A dip in fraud stemming from lost or stolen cards was the one bright spot in APAC's otherwise gloomy figures. Losses in this category slipped from £30.7m in 1H07 to £27.3m in 1H08, a drop of 11 per cent. This figure is the lowest in ten years according to APACS, which attributes the drop to the introduction of Chip and PIN.

Chip and PIN has also helped to fight fraud in the high street, with losses at UK retailers down by 35 per cent since 2005 (£73.2m during the period between January and June 2005, compared with £47.4m during between January and June 2008).

Sandra Quinn, director of communications at APACS, repeated the now familiar line that wider use of Chip and PIN outside the UK would help to curtail plastic fraud.

"Criminals continue to target those areas where we do not currently have the security benefits of chip and PIN, causing increases in fraud abroad and phone, internet and mail order shopping fraud," she said. "Fraud abroad will be made more difficult for criminals to commit as more countries rollout chip and PIN.

"To help tackle online fraud, we continue to urge shoppers to: protect their computer with up-to-date anti-virus software; only use secure websites; and register with MasterCard SecureCode and Verified by Visa when prompted – as these systems make cards more secure when shopping online," she continued.

"APACS is launching a new campaign later this month – Be Card Smart Online – which is aimed at providing further guidance and advice to help consumers stay safe online." ®

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