A release by UK payments association APACS shows a 26% increase in total card fraud losses in the six months to June 2007, compared with the first half of 2006.
The increase has been driven by a 126% rise in fraud on UK-issued cards being used overseas. In contrast, domestic card fraud continues to fall, with losses at UK retailers down 11% and losses at UK cash machines down 57%.
The introduction of chip and PIN has made it more difficult for fraudsters to commit card fraud in the UK. Criminals are now being forced to commit card fraud overseas on UK-issued cards. Losses from online, phone and mail order shopping fraud have continued to increase year-on-year. According to APACS figures, the number of adults shopping online has increased by 157% in the last five years, from 11 million in 2001 to over 28 million last year. By comparison, online, phone and mail order fraud has grown by 122% during the same time period. The fraud to turnover ratio on online card transactions has also decreased – down from 0.7% in 2004 to 0.5% in 2006.
Online banking fraud losses fell by 67% from GBP22.4 million in the first six months of 2006 to just GBP7.5 million in the same period this year. This decrease occurred because online banks have successfully implemented a range of measures to detect and prevent fraud, coupled with the fact that there was an unusually high level of online banking fraud in the first few months of 2006.