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Chip and PIN hailed as card fraud falls 13%

Scotsman.com News - Chip and PIN hailed as card fraud falls 13%

HUGO DUNCAN

CREDIT and debit card fraud fell significantly last year for the first time in a decade, thanks to the roll-out of chip and PIN.

Money lost through card fraud fell 13 per cent from £504.8 million in 2004 to £439.4 million last year, according to the UK payments association APACS. It said the fall - the first "significant" reduction since 1995 - came after chip and PIN made it more difficult for fraudsters to use stolen cards. A fall of £4 million was recorded in 2003, the year chip and PIN was introduced to the UK.

Sandra Quinn, of APACS, said: "Seeing card fraud losses come down is cast-iron proof that chip and PIN is doing its job. Back in 2002, we forecast that fraud would have risen to £800 million in 2005 if we didn't make the move to chip and PIN, so it is heartening to see total losses well beneath this figure."

But while total fraud was down, fraudulent payments where the card and cardholder were not present - such as over the internet, telephone and mail order - were up 21 per cent to £183.2 million.

There was almost a doubling in online banking fraud to £23.2 million, mainly as a result of "phishing" scams, in which fraudsters posing as banks e-mail customers to dupe them into disclosing security details.

Ms Quinn said: "Fraudsters clearly are not going to give up, so neither will we.

The banking industry is discussing how to better protect card-not-present transactions."

March 6, 2006 at 09:13 PM in Smart Cards | Permalink | TrackBack (6) | Top of page | Blog Home