New fraudster techniques emergeTwo new fraud techniques threaten cardholders

23 October 2009

ID Fraud

Be on your guard against fraudsters 

Two new forms of an old-fashioned phone scam have re-emerged, demonstrating how fraudsters are changing their tactics to get hold of consumers' card details.

Financial Fraud Action UK (FFAUK) and the Lancashire Constabulary have both alerted card holders to the new forms of phone scam.

Innovative phone scam

The first scam begins with the fraudster phoning up, typically claiming to be from the security or fraud department of the prospective victim’s bank, saying that their records have flagged up a fraudulent transaction on their card. 

The fraudster then asks the victim to write down their PIN – and place it in an envelope with their card – and advises the victim that they will send a courier to collect it. The fraudster then hires a genuine courier to collect the envelope that contains the victim’s card and PIN. The courier, who is an unwitting pawn in the scam, then hands over the envelope to the fraudster, who uses the card and PIN to withdraw cash from cash machines.

Katy Worobec, Head of Fraud Control, Financial Fraud Action UK said: 'You should never disclose your PIN or any personal financial information as a result of someone cold-calling you over the phone – wherever they claim to be from. If you have any doubts when approached in this way you should hang up the phone and call the organisation back on a number that you know is correct. If you think you have already been a victim of this scam, contact your bank or card company immediately.'

Another style of fraud

Avoid making loud phone calls when you car share

Avoid making loud phone calls when you car share

Which? has also been made aware of another technique being used by phone scammers. The fraudster calls up the card holder and claim to be from teh security or fraud department of VISA or MasterCard.

The fraudster then notifies the card holder that their card has been flagged up as due to an unusual spending pattern. They then ask whether a fictional transaction has occurred, and when the consumer confirms that it hasn't they offer to reimburse the amount. 

They then give you details including a telephone number, reference number, and your address. At this point the fraudster asks to the card-holder to verify their details and requests the three-digit security code found on the back of the card. 

Card fraud losses down

Despite this almost every type of plastic card fraud measured by FFAUK dropped between January and June 2009. For the first time ever, card-not-present fraud losses fell.

The total stolen from consumers in this way – by thieves using their cards to pay for items over the internet or telephone – declined 18%, falling from £163.9m to £134m. This may be down to the introduction of online payment security tools such as MasterCard SecureCode and Verified by Visa.

Losses from ‘skimmed’ or cloned cards fell by 48%, while fraud on lost or stolen cards and cards that went missing in the post also decreased, FFAUK’s figures show. However, losses from card identity theft went up by 23%, totaling £23.9m.

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