Card fraud and online banking fraud losses fall, but cheque fraud and phone banking fraud losses rise as fraudsters return to low-tech scams
Card fraud and online banking fraud losses fall, but cheque fraud and phone banking fraud losses rise as fraudsters return to low-tech scams
New figures released today show that fraud losses on UK cards decreased in the first half of 2011 compared with the same time last year, as did on online banking fraud. However, cheque fraud and fraud on phone banking accounts increased over the same period.
The UK Payments Association also reported total fraud losses on UK cards fell to £169.8 million between January and June 2011 – a 9% reduction compared with losses in the first half of 2010. This half-year total is the lowest for 11 years and also the third consecutive decrease. It attributed this sustained fall to the success of a number of industry initiatives, such as the increasing use of fraud detection software, the roll- out of updated chip cards and the increasing roll out of chip and PIN technology abroad.
Lost and stolen card fraud losses rose slightly, increasing by £4.4m. Initiatives such as chip and PIN have made it harder to commit ‘high-tech’ frauds, and criminals are instead reverting to more basic frauds centred on stealing people’s cards and PINs.
Phone fraud replaces online crime
Online banking fraud losses totalled £16.9m during January to June 2011 – a 32% fall on the 2010 half-year figure. The payments body said a variety of factors had contributed to the decrease in online banking fraud, including increased customer awareness of computer security, combined with banks’ use of fraud detection software.
However, phone banking fraud losses rose to £8.6m during January to June 2011, up 48%. As with card fraud, criminals are focusing on the straightforward crime of duping a customer into believing they are dealing with a bank or police representative and getting them to disclose their financial security details – such as PINs, passwords and login details – which the criminal then uses to access the customer’s bank account over the phone.
Cheque fraud losses also increased from £14m in the first half of 2010 to £16.4m during the same period in 2011. Although this is a 17% increase, the overwhelming majority of this type of fraud is stopped before the cheque is paid. In fact, more than £254m of attempted cheque fraud was spotted and stopped during the clearing process in the first half of this year.
Putting figures into perspective
Fraud figures released by the National Fraud Authority (NFA) earlier in the year serve to put these banking fraud losses into perspective. The NFA estimated that fraud in all its guises costs the UK more than £38 billion a year – card and banking fraud accounts for only 1.2% of this figure.
DCI Paul Barnard, head of the Dedicated Cheque and Plastic Crime Unit (DCPCU), said: “Losses are appreciably lower than they were a few years ago and everyone involved in tackling fraud has reason to be encouraged by this – and that includes bank customers who, as their own front-line of defence, have certainly played their part too.
“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.
