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Online fraud outweighs real world equivalent
| (07-09-07) - Cases of online financial fraud rose by 32 per cent last year, overtaking “real world” offline fraud by more than 7,000 cases from 2005, new research has shown. | 
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Cases of online financial fraud rose by 32 per cent last year, overtaking “real world” offline fraud by more than 7,000 cases from 2005, new research has shown.
There were 207,000 cases of online financial fraud in 2006, compared to 199,800 cases offline, and internet security firm Garlik, that released the figures said that this was largely due to the ease and subsequent increase in online transactions, and the fact that they don’t require a card to actually be present.
It said that card-not-present (CNP) fraud was increasing, with the total value of CNP fraud increasing by 16 per cent to a massive £212.6 million in 2006. The report, released yesterday added that almost three quarters of all CNP fraud took place online.
It said: “CNP fraud is attractive to fraudsters since businesses cannot physically check the card; there is no signature or PIN and there is no guarantee that the information provided to authenticate the transaction has been given by the legitimate cardholder.
“The numbers of retailers offering online purchasing is increasing. Therefore opportunities for CNP fraud will also increase.”
Garlik also highlighted a comment from Mike Bowron, Commissioner of the City of London Police that “fraud is in danger of becoming the forgotten crime of British policing”, warning that while it might seem like credit card fraud is falling, changes in the way that these crimes are reported means that the vast majority of credit card fraud is not reported to the police.
Garlik said: “Since 1 April 2007, victims of bank fraud must notify the financial institution directly rather than the police. The institution will then decide whether to report the details on to the police,” noting that there is criticism that “this reporting regime will give financial institutions too much discretion over what types of fraud are reported and investigated by the police”.
Chris Eagle, CreditChoices.co.uk commercial manager said, “Customers shouldn’t be put off using their cards online; they just have to ensure that they use them safely and on the right sites. Only buy from trusted websites and if you use MasterCard or Visa, make sure that you make full use of their additional security measures.
“MasterCard SecureCode and Verified by Visa allow you to choose your own password that is used as an additional layer of security when you buy online.”
Read our guide on Avoiding Credit Card Fraud.
Visit our sitster site BroadbandChoices.co.uk for guides on Online Security.