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Credit Card Fraud Falls: Secure Technology Forcing Criminals To Resort To Telephone And Cheque Scams

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Credit and debit card fraud has dipped, as criminals resort to telephone and cheque scams
Credit and debit card fraud has dipped, as criminals resort to telephone and cheque scams

Card fraud has reached a 10-year low, as criminals resort to old-fashioned cheque and telephone scams, figures have shown.

Credit and debit card losses fell by 7% year on year to reach £341 million in 2011, the lowest figure in a decade following a three-year reduction of nearly 45%, Financial Fraud Action UK said.

Meanwhile, online banking fraud losses fell by 24% to £35.4 million in 2011, despite a surge in phishing attacks which rose by 80% year on year to reach around 111,000 in 2011.

But telephone banking losses increased by around a third and cheque fraud losses saw a 17% rise in 2011 as more cheques were simply stolen and altered, the figures show.

Detective Chief Inspector Paul Barnard, head of the industry-sponsored dedicated cheque and plastic crime unit, said: "As technological advances have made our payments more secure, we've seen a spike in more simplistic crimes.

"Many scams involve customers being conned into handing over their cards and pins or their telephone banking security details by someone calling, pretending to be their bank or police.

"Our appeal to the public is to be wary of any unsolicited phone calls or emails. Never hand over your card and pin or bank security details in full as neither your bank or the police will ever ask you for these."

Card identity theft losses dropped by 41% year on year while fraud from skimmed or cloned cards was down 24%. UK cash machine fraud dropped by 12%.

But fraud on lost or stolen credit and debit cards rose by 13% and fraud from cards going missing in the mail rose by a third (34%) year on year.

Financial Fraud Action UK said the continued upgrading of chip cards has played a major part in cutting fraud, as well as improved sharing of intelligence within the industry and with law enforcement bodies.

Cards with an "updated integrated circuit card verification value" have been rolled out since January 2008 and have helped to thwart fraudsters trying to harvest card details by tampering with chip and PIN terminals.

Issuers have also introduced "dynamic data authentication" cards which make each transaction unique, making it harder for criminals to simply copy details.

Greater use of up-to-date anti-virus software and banks providing customers with extra software such as hand-held devices to log on to internet banking have also helped drive down online fraud, Financial Fraud Action UK said.

But telephone banking fraud losses rose by 32% from 2010 to 2011 to reach £16.7 million, with most losses involving customers being duped by emails or cold calls from criminals who tricked them into disclosing their personal information.

Cheque fraud losses also saw a 17% year-on-year rise to reach £34.3 million, mainly due to an increase in fraudsters stealing genuine cheques and simply altering the payee name or using details from genuine cheques to create counterfeits.

Financial Fraud Action UK emphasised that more than 90% of attempted cheque fraud is stopped before the cheque is paid.

The organisation co-ordinates the financial services industry's fraud prevention and works with bodies like the UK Cards Association.

Melanie Johnson, chair of the UK Cards Association, said: "This is the third year card fraud losses have fallen; clear proof that our endeavours to fight fraud are packing a punch.

"Customers have also played their part in driving down losses by taking heed of advice about looking after their personal and financial details.

"Fortunately they can always be confident that if they are the innocent victim of fraud, they have excellent fraud protection that they don't get if they use cash."

Around the Web

Credit card fraud - Wikipedia, the free encyclopedia

Card fraud losses reach 10-year low