Criminals are now increasingly copying bank cards in the UK before using them abroad so they can bypass chip and pin security, Lloyds TSB has warned.
While chip and pin makes it much harder for criminals to make useable copies in the UK, foreign ATMs are less secure.
This is because many overseas ATMs are still taking their information from a bank card's magnetic strip rather than the more secure microchip.
Lloyds TSB said it could not put a figure on the cost of the problem.
Closing the gaps
It has emerged that one Lloyds TSB customer had £3,000 drained from her account after a cloned version of her debit card was used to make no less than 19 separate withdrawals in the Netherlands.
Cloned UK cards have also been used in France, Hong Kong, Thailand, Sri Lanka and India.
Lloyds TSB said it had moved to close the gaps in its security system, and anyone who had lost money through the fraud would be reimbursed.
Chip and pin was introduced widely in the UK last February to help combat card fraud.
The cards contain a microchip that can store information more securely than a magnetic strip - customers having to verify a transaction using a pin number rather than a signature makes it harder for criminals to use stolen cards.
Industry figures show that total card fraud in the UK fell 13% to £439m last year, with counterfeit and lost or stolen card fraud dropping by 24% to £58.4m.
The introduction of chip and pin is said have greatly contributed to these declines.