Card, cheque and online banking fraud figures fall

Banking industry initiatives are successfully driving fraud away from customers' cards and bank accounts, according to new figures. Fraud losses on UK cards and cheques fell in the first half of 2010, compared with the same time last year. Online bank account fraud also fell during January to June 2010 - the first decrease in this type of fraud since 2007.

Total fraud losses on UK cards fell to £186.8 million between January and June 2010 - a 20 per cent reduction compared with losses in the first half of 2009. This is the lowest half-year total for ten years. This sustained fall is due to the success of a number of banking industry initiatives such as: the increasing roll-out of updated chip cards in the UK; ongoing work with the retail community to raise awareness of the ways in which retailers can protect their chip and PIN equipment from criminal attack; greater sign-up to MasterCard SecureCode and Verified by Visa by cardholders and retailers; increasing use of fraud detection tools by banks and retailers; and the increasing roll-out of chip and PIN abroad.

Online banking fraud losses totalled £24.9 million in January to June 2010 - a 36 per cent fall on the 2009 half-year figure. A variety of factors are believed to have contributed to the fall in online banking fraud, including increased customer awareness of the need to protect their own computers with up-to-date anti-virus software and banks' use of sophisticated fraud detection software. However, over the past five years fraud losses in this area have been fairly volatile over a six-month period so this decrease is not necessarily the start of an ongoing trend. Given this, and the fact that fraudsters are still focusing on this type of fraud, the industry will continue to advance its crime prevention initiatives in this area.

Phone banking fraud losses totalled £5.8 million during January to June 2010, an increase of nine per cent from January to June 2009. Most losses involve customers being tricked into disclosing security details - through cold calling or fake emails - which the criminal then uses to commit fraud. To help customers protect themselves the industry continues to highlight the fact that banks will never cold call or email customers and ask them for login details and passwords.

Cheque fraud losses decreased from £15.6 million in the first half of 2009 to £13.5 million during the same period in 2010. The overwhelming majority of attempted cheque fraud gets stopped before the cheque is paid. The industry's ongoing work to prevent cheque fraud - particularly through its use of fraud prevention profiling - has played a key part in driving these losses down. The continuing drop in cheque usage has also contributed to the 13 per cent fall in overall cheque fraud losses.

In the UK - unlike many other countries - innocent victims of any type of payment fraud on their debit or credit card or account are protected and should not suffer any financial loss.

Melanie Johnson, Chair of The UK Cards Association, which represents UK credit and debit card issuers said: "These figures are testament to the importance that the UK's card companies place on driving down card fraud losses and reducing any inconvenience to customers. We are determined to make sure that customers feel as safe and secure as possible when they use their cards. To that end the banking industry is committed to detecting and preventing card fraud in all its guises."

David Cooper, Chairman of the Fraud Control Steering Group, the payment industry's leading fraud prevention group, said of the non-plastic-related fraud losses: "The fight against fraud can only be effective with a joined-up approach, so we continue to collaborate with businesses, consumers, the police and the government whenever and wherever possible. Just last week our work with the Police Central e-Crime Unit (PCeU) paid off, with a number of criminals - who infected customers' computers with a virus to steal from their accounts - being arrested."

Fraud figures released by the National Fraud Authority (NFA) earlier in the year also serve to put these banking fraud losses into perspective. The NFA estimated that fraud in all its guises costs the UK more than £30 billion a year - card and banking fraud accounts for less than 2 per cent of this figure.