Credit card fraud at record high
Fraud involving UK credit cards is at a record high, according to new figures from the UK industry peak body. Far from solving the problem, the chip and PIN system introduced in recent years appears to have made it worse.
Credit card fraud on the rise
Losses incurred from the fraudulent use of UK cards has reached a record high.”
More Fraud Than Ever
Fraudulent transactions using UK credit cards have risen 14% since last year, according to the Association of Payment Clearing Services (APACS).
Losses incurred from the fraudulent use of UK cards hit a record £301.7 million in the first half of this year alone. Cases involving UK cards cloned and used abroad accounted for 40% of these losses, a 190% increase in three years.
Online credit card fraud surged 185% in the same period, year-on-year, to £21.4 million.
Not UK-based Fraudsters
While UK based credit card crime is still on the rise, APACS maintains that chip and PIN has made credit card theft more difficult in this country.
Instead, it points the finger at the lack of chip and PIN technology in many other countries combined with the soaring levels of card-not-present crime.
Card-not-present fraud, which includes online, phone and mail order fraud, has risen by 18% since chip and PIN was introduced in 2004. Total losses incurred due to this kind of fraud reached a staggering £161.9 million in just the first half of this year.
Is There a Solution?
Sandra Quinn, APACS director of communications said: "Criminals continue to target those areas where we do not currently have the security benefits of chip and PIN, causing increases in fraud abroad and phone, internet and mail order shopping fraud."
But the situation should improve, she said. "Fraud abroad will be made more difficult for criminals to commit as more countries roll out chip and PIN."
There are concerns, however, that chip and PIN technology is not high on the agenda in most of the countries where the fraud is concentrated.
Even in the UK, where the technology is firmly established, losses to domestic scammers rose substantially in the first half of the year with a 26% spike in face-to-face credit card fraud.
Past Predictions
Concerns about the security of chip and PIN were raised as long ago as 2005 when The Guardian's science editor Tim Radford warned about the potential for increased fraud.
He said: “Chip-and-pin technology, the latest weapon against credit card crime, will not reduce fraud and could make it easier.”
He continued: “Reliance on a personal identity number, rather than human vigilance, could create new opportunities for the unscrupulous.”
The question remains about how and when the industry and the government will tackle the mounting problem.
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