Financial fraud losses continue to fallLevels of card fraud fall to ten-year low

08 March 2012

ID fraud

Levels of card fraud are falling - but you still need to be vigilant.

Levels of credit card fraud, debit card fraud and online banking fraud all fell in the last 12 months, according to a new report from The UK Payments Council.

However, there was a rise in telephone banking and cheque fraud over the same period.

Fraud losses at 10-year low

Fraud losses on UK credit cards and debit cards fell by 7% between 2010 and 2011 - to £341 million. In the three years up until 2011, fraud losses fell by a total of nearly 45%.

This means that losses are currently at their lowest levels since 2000. The drop in fraud is due to a raft of measures taken by the industry to deter, detect and prosecute fraudsters.

Current anti-fraud initiatives include online protection schemes like MasterCard SecureCode, Verified by Visa and American Express SafeKey. Steps have also been taken to raise customer awareness about fraud, and to improve the sharing of fraud data within the industry and with law enforcement.

In addition, retailers have been told how best to safeguard their chip and Pin equipment, chips in UK cards have been upgraded and there's been the increased roll-out of chip and Pin abroad.

Online banking

Online banking fraud losses fell by 24% between 2010 and 2011, to just over £35 million. This is also due to a combination of factors, including customers using up-to-date anti-virus software, and banks providing customers with additional software and hand-held devices to log on to internet banking.   

This is despite the fact that there's actually been a big increase in phishing attacks and attacks involving malware over the same period. Phishing attacks rose by 80 % between 2010 and 2011.

Rise in levels of more basic fraud 

However, it's not all good news. In an attempt to dodge the sophisticated anti-fraud measures employed by the industry on card and online transactions, criminals appear to have focussed their attention on telephone banking and cheque fraud instead.

Telephone banking fraud losses rose by 32% from 2010 to 2011, to a total of £16.7 million. Most losses involved customers being tricked by criminals - using fake emails or cold calling - into disclosing personal security details like telephone banking passcodes. 

The losses incurred by cheque fraud rose by 17% over the same period, to just over £34 million. According to The UK Payments Council, this rise is mainly due to more fraudsters stealing genuine cheques and altering the payee name or using details from genuine cheques to create counterfeits.

Protect yourself

Here are eight quick steps you can take to minimise the risk of cheque or banking fraud happening to you:

1. Keep a note of important contact details to use if your cheque book, cards, passport or driving license are either lost or stolen.

2. Keep your home secure and keep your cheque book and personal documents locked away - burglars are increasingly searching for these documents rather than TVs and computers.

3. Redirect all post when moving house or business address to stop thieves getting hold of it.

4. Avoid using your mother’s maiden name or place of birth as a security password and never use the same password for more than one account.

5. Shred or rip up documents, receipts and bank statements when you dispose of them and regularly examine your bank and credit card statements for suspicious transactions. Also cut up old cards and cheque books and cancel them with your bank or card issuer.

6. Never give full security details or passwords to someone who calls and says they are from your bank or the police. Use the same practice for emails and never click on links in suspect messages, even if you think they are from your bank or the police.

7. Update and regularly use computer virus software and install a firewall to protect yourself from attack. Set firewalls to the highest available security level. For information see our guide to online safety.

8. Never write down passwords or Pins - and shield the keypad when entering your Pin in shops or at cash machines.

More on this...