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Card, cheque and online banking fraud falls 28%

Online banking fraud rises, but cloning halves

Cash machine: you have not been charged for this transaction

Banks have refused refunds for cash machine fraud using the correct Pin

Fraud on debit and credit cards fell by more than a quarter in 2009 to £440.3m, according to new figures released today.

The drop of 28% between 2008 and 2009 results from advances in chip and PIN technology, the increasing use of sophisticated fraud detection tools by banks and retailers, and the work of the Dedicated Cheque and Plastic Crime Unit (DCPCU), the banking-sponsored special police unit. It is the first time that card fraud has decreased since 2006.

Key card-fraud findings

  • Counterfeit card fraud (skimming and cloning) fell by over a half to £80.9m.
  • Online banking fraud losses rose by 14% to £59.7m. This increase is largely due to criminals using more sophisticated methods to target online banking customers through malware, which targets vulnerabilities in customers’ own PCs. There were also more than 51,000 phishing incidents recorded during 2009 – a 16 per cent increase on the amount seen in 2008.
  • Cheque fraud fell 29% from £41.9m to £29.8m. The industry’s use of fraud prevention profiling has played a key part in driving these losses down. The continuing decline in cheque usage has also played a part
  • Phone banking fraud losses were collated for the first time in 2009 and totalled £12.1 million. Most losses involve customers being duped into disclosing security details – through cold calling or fake emails – which the criminal then uses to commit fraud.
  • There has also been a significant decrease in fraud abroad which fell by 47% to £122.7m. One of the factors causing this is the fraud detection systems used by the banks and card companies, which monitor for unusual spending – meaning that potential fraud is stopped before it happens.

Melanie Johnson, Chair of The UK Cards Association, said: ‘The cards industry sees fighting fraud as a key part of keeping its customers’ interests centre-stage. A fall in card fraud is good news for everyone – UK consumers, retailers and the industry. We recognise that cards will always be targeted by criminals, so we are determined not only to continue to prevent, detect and deter those who are behind this type of crime, but also to make sure that innocent victims don’t lose out.’

Expert Which? advice to fight card fraud and ID fraud

For more expert analysis of card fraud, don’t miss the . Which? Money expert Ian Robinson offers top tips for keeping your details safe, while special guest Professor Ross Anderson explains why the research of his Cambridge team raises questions about the safety of Chip and Pin technology. Listen to the now for free.

Read the free Which? guide to beating identity fraud to find out how to protect yourself.

If you’re not happy with your existing bank or credit card provider’s security measures, find a new one with Which? Best Rate current accounts, savings accounts and credit cards.


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