Money News

Card fraud down as criminals turn to “simple” theft

By Martin Fagan

Sophisticated card technology means thwarted fraudsters are returning to lo-tech scams such as distraction and card theft .

Hi-tech security measures on credit and debit cards has seen an 9% reduction in card fraud in the first half of 2011, according to the latest data from Financial Fraud Action UK.

This half-year total is the lowest for eleven years and also the third consecutive decrease, and the , the industry-wide co-ordinator of fraud prevention activity says the sustained fall is due to the success of a number of industry initiatives.

The increasing use of fraud detection software, the roll-out of updated chip cards and the increasing use of chip-and-pin technology abroad has made fraudsters look to increasingly lo-tech ways of scamming.

Thwarted criminals are reverting to more straightforward ways of duping people into believing they are dealing with a bank or police representative and getting them to disclose pin’s, passwords and login details, which criminals then use to access the victim’s bank account over the phone.

As a consequence, during the first six months of 2011, phone banking fraud losses rose to £8.6million -a 48% increase. Lost and stolen card fraud losses also rose, to £25.7million from £21.3million - a 20% increase.

Although losses from cheque fraud increased by 17% over the same period, the overwhelming majority of this type of fraud is stopped before the cheque is paid. In fact, Financial Fraud Action UK says more than £254million of attempted cheque fraud was spotted and stopped during the clearing process.

"Losses are appreciably lower than they were a few years ago and everyone involved in tackling fraud has reason to be encouraged by this,” said DCI Paul Barnard, head of the Dedicated Cheque and Plastic Crime Unit (DCPCU), the special police squad sponsored by the banking industry.

"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 pin’s. If anyone does, they are probably a criminal, so hang up the phone or delete the email."