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Card fraud falls, but online banking fraud up 55%

Official figures paint mixed picture for consumers

ID Fraud

Be on your guard against fraudsters 

Credit and debit card fraud fell by 23% in the first six months of 2009, but online banking losses soared according to official figures.

Financial Fraud Action UK (FFAUK) says card fraud losses decreased to £232.8m in the first half of this year – down £71.4m on the same period in 2008.

However, losses from online banking fraud reached £39m, representing a year-on-year increase of 55%.

Card fraud losses down

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.

Online banking fraud increases

Even more worryingly, FFAUK’s report shows online banking fraud is rising rapidly. During the six months to June 2009 it increased by 55% on the same period in 2008, costing UK consumers £39m.

FFAUK says there were also 26,000 phishing incidents during the first half of this year – a figure 26% higher than in 2008. Vulnerabilities in consumers’ own PCs were identified by FFAUK as key causes of the rise. According to the organisation, fraudsters are using ‘more sophisticated’ methods such as malware scams to obtain people’s personal details.

However, Which? Money recently reported on the flaws in some banks’ customer-facing online banking systems. Of the 10 banks rated by Which? for online security, only one, Barclays, received an ‘excellent’ rating.

Tips for staying safe online

Which? money expert Martyn Saville said: ‘While it’s good news that plastic card fraud appears to be declining, the worrying rise in online banking fraud is a reminder that we all need to stay vigilant.

‘It’s crucial to make yourself aware of the simple rules that should help keep your cash safe from criminals, so I’d highly recommend reading the comprehensive Which? guide to understanding card fraud. Just checking for the padlock symbol and the letters https in the URL of any websites you use, and never following links in emails, however convincing they look, could help keep your data safe.

If you bank online, it’s also a good idea to check out our report on online banking security and see how your provider scored.’

If you use a computer for online banking or financial transactions, it’s important that you keep it up to date with adequate anti-virus software and install a personal firewall. Read the Which? guide to protecting your online ID.

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