Card fraud hits record high despite fortune spent on chip-and-pin security

British consumers are robbed once every seven seconds, often by criminals overseas. Julian Knight and Kate Hughes report

Fraud carried out on credit and debit cards is expected to have topped £600m for the first time last year, when banking industry figures are released this week. Despite the introduction nearly five years ago of chip-and-pin security technology, at a cost of hundreds of millions of pounds, the tide of fraud is rising ever higher.

A British credit or debit card gets fraudulently used or counterfeited once every seven seconds, industry figures show. And Apacs, the UK payments service, is expected to say this week that card fraud rose again in 2008, this time by more than 10 per cent to around £600m. This compares to £535m for the whole of the previous year.

But Sandra Quinn, a spokeswoman for Apacs, says that following the introduction of chip-and-pin – where users have to verify their purchases by inputting a personal identification number into till-side terminals – organised gangs of criminals have been turning to what is called "card not present" fraud.

"As the name suggests, this means that the fraudster uses a stolen card number on the internet or by mail order," she says. "This is less risky as they don't have to physically go to a shop to hand over a counterfeit card."

A substantial proportion of fraud on UK cards has taken place overseas. "Card numbers are acquired in the UK by criminal gangs and then used overseas to buy goods. Card fraud is a truly global undertaking and so increasingly is the fight against it," comments Steve Head, chief superintendent at the City of London Police economic crime unit.

Several "hotspots" for card fraud have been identified, such as the US, Canada and the Far East, but in recent times gangs have emerged in Australia and China, all preying on British card customers.

The banks say they have stepped up their fight against the card fraudsters. "It is difficult to pursue some of these gangs because they are located overseas in a different jurisdiction and they use the internet to commit their crimes," explains the leader of an anti-fraud unit working for one of the UK's major high-street banks, who wished to remain anonymous. "However, generally, we are getting better at spotting frauds earlier and they are getting away with less per transaction as a result."

Although it is usually the banks and retailers that pick up the tab for card fraud, Ms Quinn says consumers lose out too: "Having your card details stolen and used can be worrying and create a lot of hassle. What's more, people are increasingly finding that when they are on holiday abroad, their cards are being stopped for security purposes."


Being ripped off by fraudsters is traumatic. But you don't have to become a victim. Just follow these 10 simple steps to secure your credit and debit accounts.

1. Protect your PIN. Shoulder surfing is a common way for thieves to work out your code, simply by looking over your shoulder. It's vital to shield the PIN pad from prying eyes everywhere from the cashpoint to the supermarket checkout. It's also worth taking a look over your shoulder as you go to pay or withdraw cash. If someone is standing too closely behind you, simply ask them to step back.

2. Look for anything unusual at cash machines. With their enclosed sides, the hole in the wall can make us feel secure, but there is widespread evidence of fraudsters tampering with machines. This often involves placing a false card reader over the card slot, or even a false front over the entire machine which reads your card details as you insert it. A tiny camera positioned above the key pad records your PIN, and criminals have all the details they need. Don't use the machine if you suspect a problem, and shield your PIN at any cashpoint. Where possible, use machines inside bank branches.

3. Don't abandon your card. If it is swallowed by a machine, or you are asked to input your PIN more than once, the machine could have been compromised to take your card. The criminal can then simply walk up and take your plastic after you leave. If you can, stay in place and call the helpline number that should be displayed on the machine.

4. Cancel your card immediately if it is lost or, of course, stolen. Even if you know what has happened to it and don't feel it could be used, a relaxed attitude is not worth the risk. Once you've notified your card provider, it will stop any further transactions on your card, cancel it and arrange for a new one to be issued.

5. Don't write down your PIN. A new credit or debit card should arrive separately from the notification of your PIN to reduce the likelihood of it being stolen and used while in transit. If your card is delayed, check its progress with your provider. It is tempting to keep a note of your PIN when it does arrive to help you remember it, but card providers strongly discourage this. If it is necessary, record the PIN away from the card, and certainly not in your wallet or purse.

6. Always shred or burn all personal documents. Fraudsters are well known for searching through bins for personal details which they can then use to apply for cards and loans posing as you.

7. Keep your card in sight at all times. Handheld chip and PIN machines are now in use throughout the UK and in many international destinations, so there is little need for your card to be taken away for a transaction. Try to insist on this, but if it is absolutely necessary for the plastic to be read elsewhere, go with it to complete a transaction. Fraudsters can use a technique called skimming to scan and duplicate the information on your card in a matter of seconds.

8. Beware of unsolicited electronic mail. Fraudsters use "phishing" emails to dupe people into disclosing personal information by appearing to be from their bank or building society, even providing a link to a false site that looks identical to the original. Your bank has your details and won't ever ask for them all, If you do receive an email that seems to be from your bank, go to the website independently without using the links, or call the bank to check any requests.

9. When shopping online, try to stick to well-known brands or sites. Look for secure websites when you buy, with the padlock symbol and an https://... address rather than http://.... Visa and Mastercard also offer protection from unauthorised transactions via the Verified by Visa or Mastercard Securecode scheme. Visit their websites for further information.

10. Finally, never inform anyone else of your PIN or let them use your card – however much you might trust them.

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at

Arts and Entertainment
The teaser trailer has provoked more questions than answers
filmBut what is Bond's 'secret' that Moneypenny is talking about?
Johnny Depp is perhaps best known for his role as Jack Sparrow in Pirates of the Caribbean
peopleBut how did he break it?
Arts and Entertainment
Paul Walker and Vin Diesel in Fast and Furious 5
Lewis Hamilton secured his second straight pole of the season
f1Vettel beats Rosberg into third after thunderstorm delays qualifying
Finacial products from our partners
Property search
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Recruitment Genius: Retirement Coordinator - Financial Services

    Negotiable: Recruitment Genius: To provide a prompt, friendly and efficient se...

    Recruitment Genius: Annuities / Pensions Administrator

    Negotiable: Recruitment Genius: You will be the first point of contact for all...

    Ashdown Group: HR, Payroll & Benefits Officer - Altrincham - up to £24,000.

    £18000 - £24000 per annum + benefits: Ashdown Group: HR, Payroll & Benefits Of...

    Ashdown Group: Learning and Development Programme Manager

    £35000 - £38000 per annum + benefits : Ashdown Group: A highly successful, int...

    Day In a Page

    The saffron censorship that governs India: Why national pride and religious sentiment trump freedom of expression

    The saffron censorship that governs India

    Zareer Masani reveals why national pride and religious sentiment trump freedom of expression
    Prince Charles' 'black spider' letters to be published 'within weeks'

    Prince Charles' 'black spider' letters to be published 'within weeks'

    Supreme Court rules Dominic Grieve's ministerial veto was invalid
    Distressed Zayn Malik fans are cutting themselves - how did fandom get so dark?

    How did fandom get so dark?

    Grief over Zayn Malik's exit from One Direction seemed amusing until stories of mass 'cutting' emerged. Experts tell Gillian Orr the distress is real, and the girls need support
    The galaxy collisions that shed light on unseen parallel Universe

    The cosmic collisions that have shed light on unseen parallel Universe

    Dark matter study gives scientists insight into mystery of space
    The Swedes are adding a gender-neutral pronoun to their dictionary

    Swedes introduce gender-neutral pronoun

    Why, asks Simon Usborne, must English still struggle awkwardly with the likes of 's/he' and 'they'?
    Disney's mega money-making formula: 'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan

    Disney's mega money-making formula

    'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan
    Lobster has gone mainstream with supermarket bargains for £10 or less - but is it any good?

    Lobster has gone mainstream

    Anthea Gerrie, raised on meaty specimens from the waters around Maine, reveals how to cook up an affordable feast
    Easter 2015: 14 best decorations

    14 best Easter decorations

    Get into the Easter spirit with our pick of accessories, ornaments and tableware
    Paul Scholes column: Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season

    Paul Scholes column

    Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season
    Inside the Kansas greenhouses where Monsanto is 'playing God' with the future of the planet

    The future of GM

    The greenhouses where Monsanto 'plays God' with the future of the planet
    Britain's mild winters could be numbered: why global warming is leaving UK chillier

    Britain's mild winters could be numbered

    Gulf Stream is slowing down faster than ever, scientists say
    Government gives £250,000 to Independent appeal

    Government gives £250,000 to Independent appeal

    Donation brings total raised by Homeless Veterans campaign to at least £1.25m
    Oh dear, the most borrowed book at Bank of England library doesn't inspire confidence

    The most borrowed book at Bank of England library? Oh dear

    The book's fifth edition is used for Edexcel exams
    Cowslips vs honeysuckle: The hunt for the UK’s favourite wildflower

    Cowslips vs honeysuckle

    It's the hunt for UK’s favourite wildflower
    Child abuse scandal: Did a botched blackmail attempt by South African intelligence help Cyril Smith escape justice?

    Did a botched blackmail attempt help Cyril Smith escape justice?

    A fresh twist reveals the Liberal MP was targeted by the notorious South African intelligence agency Boss