Card fraud in 2008 tops £600m

Figures from Apacs find spiralling card-not-present fraud continues to drive UK losses

Fraud losses on UK-issued cards spiked 14 per cent last year as rising card-not-present (CNP) fraud continues to bite online retailers.

Figures released today by UK payment association Apacs showed 2008's total losses stood at £609.9m, more than half of which was CNP fraud. Encompassing internet, phone and mail order fraud, CNP fraud was up 13 per cent on 2007 and losses reached £328.4m.

Counterfeit fraud using skimmed or cloned cards rose 18 per cent to £169.8m, while fraud involving card ID theft increased 39 per cent to £47.4m. Losses on lost or stolen cards fell four per cent to £54.1m, while fraud involving non-receipt of mail was flat at £10.2m.

Fraud committed in this country was up 16 per cent with losses totalling £379.7m, while fraud committed abroad on UK cards rose 11 per cent to £230.1m. Cheque fraud losses also rose a quarter last year to £41.9m, while those involving online banking fraud rocketed by 132 per cent to £52.5m.

Despite the overall rise, losses as a percentage of overall card revenue were 0.12 per cent, compared to 0.14 per cent four years ago. Apacs claimed the drop can be largely attributed to the positive impact of the introduction of chip and PIN technology.

Apacs also highlighted that CNP fraud is growing at a slower rate than the online retail market as a whole. Between 2001 and 2008 the annual worth of online transactions rose 524 per cent from £6.6bn to £41.2bn, while CNP fraud losses rose only 243 per cent in that time.

Neil Munroe, external affairs director at online credit checking specialist Equifax, counselled consumers to be constantly mindful of potential fraud. "Fraudsters are increasingly finding new ways to extract money or steal an identity, so every form of online activity should be considered very carefully," he said.

"And it is not just financial services – consumers need to be careful about what they put on social networking sites and ensure they use privacy policies fully. It is likely to take a number of hours to get matters resolved if an individual’s identity has been stolen online by fraudsters, which could mean difficulties in getting new credit during this time."