Debit and Credit Card Fraud Rises Dramatically
Card-Not-Present Fraud Increases due to the Success of Chip-and-PIN
May 16, 2009
The success of chip-and-PIN has led many criminals to turn to Card-Not-Present (CNP), card counterfeiting and online banking fraud. Figures produced by the Association for Payment Clearing Services (APACS), showed that debt and credit card fraud rose by 14% to £609.9 million during 2008. The methods used by criminals to get hold of personal information have become increasingly sophisticated.
Card Counterfeiting Increases due to Absence of Chip-and-PIN
Card counterfeiting fraud – where the criminal clones or skims cards – rose to £169.8 million, representing a rise of 18%. The Association for Payment Clearing Services (APACS) stated that the majority of card fraud was as a result of criminals stealing UK cards and counterfeiting magnetic strips for use in countries where chip-and-PIN was yet to be introduced, such as America.
Online Banking Fraud Rises
Online banking fraud grew from £22.6 to £52.5 million during 2008, a rise of 132%. Neil Munroe, of Equifax, stated: “It is perhaps not surprising to see such a big rise in online banking fraud year on year, simply because of the enormous increase in online shopping activity as a whole. But these new figures do seem to suggest that consumers are adopting the online culture without necessarily recognising the risks."
Card-not-Present Fraud Soars
Card-not-present (CNP) fraud takes place via mail order, over the phone or on the Internet. CNP fraud amounted to £328.4 million during 2008, a rise of 13%. This is despite the introduction of MasterCard Secure and Verified by VISA, which means that a customer needs to enter a password in order to complete online debit and credit card transactions.
Consumers should regularly check their statements for signs of debit and credit card fraud. Should unauthorised transactions have taken place, contact the bank immediately so a block can be put on the card and chargeback any money fraudulently used. Use a secure wireless Internet connection to prevent online banking fraud. Avoid online phishing by never accessing financial web sites from an email link.
Readers may also be interested in finding out how to prevent online fraud or reduce credit card debt. Others may wish to identify the main reasons for personal loan decline.
Source
Budworth, David. (March 19, 2009) "Banking and card fraud hit new highs." The Times.
Disclaimer: This article in no way attempts to give legal or tax advice. One should consult a licensed attorney, tax advisor, or other qualified professional.
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