Fraudsters resort to debit and credit card snatching
Overall, fraud losses on UK credit and debit cards fell by 9% in the first half of the year compared with the same period in 2010, according to the UK Cards Association. But this decline masked an increase in 'snatch-and-run' crime.
The half-year total of £169.8 million was the lowest in eleven years, and marked the third year in a row that fraud losses have declined. This is because the industry has rolled out updated chip cards, and chip and PIN has also been rolled out abroad.
The UK Cards Association said these initiatives have made it harder to commit high-tech frauds, and criminals are instead reverting to more basic frauds centred around stealing people's cards and PINs. These scams range from distracting people in shops or at cash machines and then stealing their cards without them noticing, to simply tricking them into handing over their cards and PINs on their own doorstep.
Online banking fraud losses totalled £16.9 million between January and June – a 32% fall on a year ago. A variety of factors have contributed to the decrease in online banking fraud, including increased customer awareness of computer security combined with banks' use of fraud detection software.
However, phone banking fraud losses rose to £8.6 million, a 48% increase. As with card fraud, criminals are focusing on the straightforward crime of duping a customer into believing they are dealing with a bank or police representative and getting them to disclose their financial security details – such as PINs, passwords and login details - which the fraudster then uses to access the customer's bank account over the phone.
Cheque fraud losses increased from £14 million in the first half of 2010 to £16.4 million this year. Although this is a 17% increase, the overwhelming majority of this type of fraud is stopped before the cheque is paid. In fact, more than £254 million of attempted cheque fraud was spotted and stopped during the clearing process in the first half of this year.
Fraud figures released by the National Fraud Authority earlier in the year put these banking fraud losses into perspective. The NFA estimated that fraud in all its guises costs the UK more than £38 billion a year – card and banking fraud accounts for only 1.2% of this figure.
Importantly, in the UK - unlike many other countries outside Europe - innocent victims of any type of payment fraud on their debit or credit card or account are protected and should not suffer any financial loss.
DCI Paul Barnard, head of the Dedicated Cheque and Plastic Crime Unit, the special police squad which is sponsored by the banking industry and has an ongoing brief to help stamp out organised payment fraud across the UK, said:
"Losses are appreciably lower than they were a few years ago and everyone involved in tackling fraud has reason to be encouraged by this – and that includes bank customers who, as their own front-line of defence, have certainly played their part too.
"However, there has been an increase in old fashioned scams – criminals using distraction techniques and social engineering methods to get hold of people's cards or phone banking details. We are urging everyone to be on their guard. Your bank or the police will never cold call you or email you and ask you for your login details, cards or PINs. If anyone does, they are probably a criminal, so hang up the phone or delete the email."
Card security tips
• Shield your PIN when entering it at a cash machine
• Regularly update the anti-virus software on your computer; also update the security software provided by your bank for online banking when prompted
• Be wary of unsolicited emails and telephone calls and don't disclose your security details