Card-not-present fraud up 13 per cent

The main driver for growth in card fraud is on those transactions without chip and PIN protection, the main UK payment industry body, Apacs said today, as it released its fraud figures for 2008.

Card-not-present (CNP) fraud losses increased by 13 per cent over the last year to now account for 54 per cent of all card fraud losses. This also amounts of a rise in CNP fraud of 243 per cent between 2001 to 2008.

But Apacs said this reflected the growing popularity of shopping online, which relies on CNP payments, and providing a lucrative alternative to criminals forced to look for alternatives with the adoption of chip and PIN.

It added that tackling CNP fraud was an industry priority, as it continues to encourage cardholder and retailer take-up of secure online payment systems that help prevent online shopping fraud, such as MasterCard SecureCode and Verified by Visa.

Overall, card fraud losses total 609.9 million, online banking fraud losses 52.5 million and cheque fraud losses 41.9 million.

Online banking fraud losses grew 132 per cent on 2007 levels, due mainly to an increase in phishing, Apacs said. At the same time, online banking customers without sufficient security protection are increasingly being targeted by malware attacks.

Counterfeit fraud losses increased by 18 per cent in 2008, but the growth is markedly down on last years 46 per cent rise, where the majority of this fraud is due to criminals stealing card details in the UK to make counterfeit magnetic stripe cards for use in countries yet to upgrade to chip and PIN.

And card ID theft losses increased by 39 per cent to 47.4 million, due to a rise in criminals taking over the running of another persons credit or debit card. This fraud typically involves a criminal obtaining a genuine card and a genuine PIN, and has contributed to the fraud increases seen at UK shops and cash machines.

Apacs added that the industry welcomed today's launch of the National Fraud Strategic Authority's (NFSA) National Fraud Strategy, which it said would usher in a new approach to combating fraud.

This intelligence sharing initiative will provide the vehicle for relevant organisations, including Apacs, to work together to tackle fraud. Confirmed fraud data from the payment industry's existing Fraud Intelligence Sharing System will feed into the strategy.

Miya Knights

A 25-year veteran enterprise technology expert, Miya Knights applies her deep understanding of technology gained through her journalism career to both her role as a consultant and as director at Retail Technology Magazine, which she helped shape over the past 17 years. Miya was educated at Oxford University, earning a master’s degree in English.

Her role as a journalist has seen her write for many of the leading technology publishers in the UK such as ITPro, TechWeekEurope, CIO UK, Computer Weekly, and also a number of national newspapers including The Times, Independent, and Financial Times.