Card fraud and online banking fraud losses fall, but cheque fraud and phone banking fraud losses rise

- Fraudsters return to low-tech scams as initiatives continue to drive down fraud

- Industry reminds customers of top tips to help avoid the common scams

New figures released today (5 October 2011) show that fraud losses on UK cards decreased in the first half of 2011 compared with the same time last year, as did fraud on online bank accounts. However, cheque fraud and fraud on phone banking accounts increased over the same period.

Total fraud losses on UK cards fell to £169.8 million between January and June 2011 - a 9 per cent reduction compared with losses in the first half of 2010. This half-year total is the lowest for eleven years and also the third consecutive decrease. The sustained fall is due to the success of a number of industry initiatives such as the increasing use of fraud detection software, the roll-out of updated chip cards and the increasing roll-out of chip and PIN technology abroad. Lost and stolen card fraud losses rose slightly, increasing by £4.4 million. Initiatives such as chip and PIN have made it harder to commit 'high-tech' frauds, and criminals are instead reverting to more basic frauds centred around stealing people's cards and PINs. These scams range from distracting people in shops or at cash machines and then stealing their cards without them noticing, to simply tricking them into handing over their cards and PINs on their own doorstep¹.

Online banking fraud losses totalled £16.9 million during January to June 2011 - a 32 per cent fall on the 2010 half-year figure. A variety of factors have contributed to the decrease in online banking fraud, including increased customer awareness of computer security combined with banks' use of fraud detection software. However, phone banking fraud losses rose to £8.6 million (a 48 per cent increase) during January to June 2011. 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.

Cheque fraud losses increased from £14.0 million in the first half of 2010 to £16.4 million during the same period in 2011. Although this is a 17 per cent increase, the overwhelming majority of this type of fraud is stopped before the cheque is paid. In fact, more than £254 million of attempted cheque fraud was spotted and stopped during the clearing process in the first half of this year.

Fraud figures released by the National Fraud Authority (NFA) earlier in the year serve to put these banking fraud losses into perspective. The NFA estimated that fraud in all its guises costs the UK more than £38 billion a year - card and banking fraud accounts for only 1.2 per cent of this figure. Furthermore, in the UK - unlike many other countries outside Europe - innocent victims of any type of payment fraud on their debit or credit card or account are protected and should not suffer any financial loss.

DCI Paul Barnard, Head of the Dedicated Cheque and Plastic Crime Unit (DCPCU), the special police squad which is sponsored by the banking industry and has an ongoing brief to help stamp out organised payment fraud across the UK, said:"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 front-line of defence, have certainly played their part too.

"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."

Half-yearly plastic card fraud losses on UK-issued cards January to June 2007 to January to June 2011

Card Fraud Type - on UKissued credit and debit cards	Jan-June 2007	Jan-June 2008	Jan-June 2009	Jan-June 2010	Jan-June 2011	+/- 10/11
Phone, internet and mail order fraud (Card-not-present fraud)	£137.0m	£163.9m	£134.0m	£118.2m	£109.2m	-8%
Counterfeit (skimmed/cloned) fraud	£72.3m	£88.8m	£46.3m	£28.2m	£18.0m	-36%
Fraud on lost or stolen cards	£30.7m	£26.8m	£25.1m	£21.3m	£25.7m	+20%
Card ID theft	£18.7m	£19.5m	£23.9m	£15.0m	£11.5m	-23%
Mail non-receipt	£4.9m	£5.3m	£3.5m	£3.8m	£5.4m	+42%
TOTAL	£263.6m	£304.2m	£232.8m	£186.8m	£169.8m	-9%
Contained within this total:
UKretail face-to-face transactions	£37.5m	£47.3m	£34.7m	£33.8m	£22.3m	-34%
UKcash machine fraud	£17.1m	£20.9m	£20.3m	£17.0m	£15.2m	-11%
Domestic/International split of total:
UKfraud	£154.8m	£181.8m	£165.6m	£135.2m	£130.4m	-4%
Fraud abroad	£108.8m	£122.4m	£67.1m	£51.5m	£39.4m	-24%

* Due to rounding, the sum of separate items may differ from the totals shown.

Consumers can significantly reduce the chances of being a victim of fraud by following these top tips:

i)  Ensure you are the only person who knows your PIN. Your bank or the police will never phone or email you and ask you to disclose it.

ii) Your bank will never ring you and tell you that they are coming around to pick up your card, so never hand it over to anyone who comes to 'collect it'.

iii) Shield your PIN with your free hand when typing it into a keypad in a shop or at a cash machine.

iv) Only shop on secure websites. Before entering card details ensure that the locked padlock or unbroken key symbol is showing in your browser.

v) Rip up or preferably shred statements, receipts and documents that contain information relating to your financial affairs when you dispose of them.

vi) Never accept a cheque from someone unless you know and trust them, especially if the cheque is for a high value.

vii) When writing a cheque make sure you draw a line through all unused space on the payee line and the amount line to help prevent the cheque being fraudulently altered.

viii) Make sure you have up-to-date anti-virus software installed on your computer.

 

 

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