Page last updated at 15:54 GMT, Wednesday, 1 October 2008 16:54 UK

UK consumers see card fraud rise

Chip and PIN machine
Chip and PIN technology is meant to help reduce card fraud

UK consumers lost 302m to card fraud in the first six months of this year, an increase of 14% compared with the first half of 2007, figures suggest.

The Association of Payment Clearing Services (APACS) said counterfeiting remained a major problem while 40% of total card fraud took place abroad.

Online banking fraud rose 185% during the period, year-on-year.

But losses at UK retailers and fraud from lost or stolen cards fell, largely due to chip and PIN technology.

Online fraud

Phone, internet and mail order shopping account for over half of all card fraud losses, although the rate of increase is falling.

Criminals continue to target those areas where we do not currently have the security benefits of chip and PIN
Sandra Quinn, director of communications, APACS

The marked jump in online banking fraud is largely due to 'phishing', a practise used by fraudsters who try to get unsuspecting members of the public to divulge their personal security information by posing as online banks or businesses.

More than 20,000 fraudulent phishing websites were set up in the first half of 2008.

Chip and PIN

Overseas losses have risen 190% in the past three years.

Typically, fraudsters will copy the magnetic strip data of a UK-issued card before creating a counterfeit card that can then be used in countries that have not upgraded to chip and PIN technology.

Sandra Quinn, director of communications at APACS, said: "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."

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This type of fraud should become much harder to commit when the European banking industry rolls out chip cards in 2010.

Largely due to the introduction of chip and PIN technology, losses at UK retailers have fallen, from 73.2m between January and June 2005 to 47.4m between January and June this year.

APACS' advice to guard against fraud:

  • Don't let your cards or your card details out of your sight when making a transaction
  • Destroy any documents or receipts that contain personal financial information when you have finished with them
  • Do not keep your passwords, login details or PIN numbers written down
  • Do not disclose PINs, login details or passwords in response to unsolicited emails
  • Shield your PIN when making a purchase or withdrawing cash
  • Only divulge card details over the phone when you have made the call or when you are familiar with the company
  • Access internet banking or shopping sites by typing the address into your browser. Never enter your personal details on a website you have accessed via a link from an email
  • Shop at secure websites by checking that the security icon is showing in your browser window (a locked padlock or an unbroken key)
  • Always log out after shopping and save the confirmation email as a record of your purchase

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