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Crooks beat anti-fraud cops with old-school bank scams

Fraud losses fell overall

Payment card and banking fraud losses fell this year against a rise in cash pilfered through old-school cheque and telephone banking fraud, according to figures released today for the UK.

Total fraudulent losses dropped to £169.8m between January and June 2011, down 9 per cent from £187m in the same period last year. Losses fell to their lowest in 11 years, according to banking industry group the UK Cards Association.

The association credits improved fraud detection software and the rollout of updated chip and PIN technology outside the UK for the decline. Lost and stolen card fraud losses, by contrast, rose from £21.3m to £24.7m.

Online banking fraud losses reached £16.9m during the first half of 2011, down 32 per cent on the same period last year.

However, phone banking fraud losses rose to £8.6m during this period, a 48 per cent rise on figures from the first six months of 2010. Most of these losses arise as a consequence of simple con tricks, according to the UK Cards Association.

"As with card fraud, criminals are focusing on the straightforward crime of duping a customer into believing they are dealing with a bank or police representative and getting them to disclose their financial security details – such as PINs, passwords and login details - which the criminal then uses to access the customer’s bank account over the phone," the association said in a statement.

Cheque fraud losses increased to £16.4m during 1H2011, up from £14m in 1H2010. A further £254m of attempted cheque fraud was spotted and stopped before losses occurred.

DCI Paul Barnard, head of the Dedicated Cheque and Plastic Crime Unit - the special police squad that is sponsored by the banking industry - said consumers need to be on their guard against the return of "old fashioned" scams.

“Losses are appreciably lower than they were a few years ago and everyone involved in tackling fraud has reason to be encouraged by this – and that includes bank customers who, as their own frontline of defence, have certainly played their part too," DCI Barnard said.

“However, there has been an increase in old fashioned scams – criminals using distraction techniques and social engineering methods to get hold of people’s cards or phone banking details. We are urging everyone to be on their guard.

"Your bank or the police will never cold call you or email you and ask you for your login details, cards or PINs. If anyone does, they are probably a criminal, so hang up the phone or delete the email."

The UK Cards Association has a full breakdown of the figures - along with a series of top tips on avoiding fraud – in a statement on the losses here [PDF]. ®

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