Fraudulent credit card activity fell by 28% between 2008 and 2009 to around £440 million according to reports released by the the UK Cards Association. Cheque fraud also fell to around £30 million for the year.
However, despite this good news, it was revealed that criminals were instead turning their attention to online banking. Fraud losses for online banking actually rose by 14 per cent to £59.7 million.
A spokesperson for the UK Cards Association said that the drop the card fraud was helped by the widespread adoption of chip and PIN cards and better tools being developed by banks and retailers.
Today banks and credit card companies will closely watch an individual’s spending patterns. If there is any unusual activity on the card then the banks will be alerted. The banks and the credit cards will then contact the owner of the credit card to determine if their latest transactions were genuine. It is thought that this measure was particularly effective in stopping card fraud abroad, which fell by 47 per cent to £122 million.
Online scammers are now using a series of sophisticated techniques to deceive and obtain credit card and bank account details. The UK Cards Association found that the fraudsters were now looking for more vulnerable points to attack.
The UK Cards Association found that nowadays the criminals were targeting weaknesses in the individual’s computer rather than trying to crack the bank’s own systems, which were far more difficult to break into. There was also a 16 per cent increase to 51,000 in recorded incidents of phishing - where fraudsters send fake e-mails posing as financial organisations in order to extract personal details from individuals.
David Cooper, chairman of the Fraud Control Steering Group, the payment industry’s leading fraud prevention group, said: “Although online banking losses have shown a year-on-year increase, card fraud remains a main focus of criminal activity. The industry remains committed to containing and reducing all areas of fraud.”
