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
Sunday 15 March 2009
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."
DON'T LET THE CROOKS STEAL YOUR MONEY. TEN TIPS FOR PLASTIC SAFETY
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.
Questions Of Cash: 'Your bank card may have been cloned'
Bargain Hunter: BT improves its mobile reception with 'incredibly competitive' deals
Mark Dampier: What price equities when cost cutting does nothing for profits?
Questions of Cash: Why was my case ignored by My Civil Service Pension?
Offset your mortgage and save thousands
- 2 The West has it totally wrong on Lee Kuan Yew
- 3 #FreeTheNipple: Women in Iceland bare breasts in solidarity with trolled student
- 4 Scientists have discovered a simple way to cook rice that dramatically cuts the calories
Nigel Farage brands LGBT activists 'filth' and 'scum' and accuses them of scaring away his children after they invade his local pub
Ukip supporters are 55 or older, white and socially conservative, finds British Social Attitudes Report
JK Rowling responds to fan tweeting she 'can't see' Dumbledore being gay
Russia threatens Denmark with nuclear weapons if it tries to join Nato defence shield
Jeremy Clarkson sacked live: Alan Yentob 'wouldn't rule out' ex Top Gear host's BBC return
Germanwings plane crash live: Co-pilot Andreas Lubitz wanted to 'do something people would remember him for'
iJobs Money & Business
Negotiable: Recruitment Genius: To provide a prompt, friendly and efficient se...
Negotiable: Recruitment Genius: You will be the first point of contact for all...
£18000 - £24000 per annum + benefits: Ashdown Group: HR, Payroll & Benefits Of...
£35000 - £38000 per annum + benefits : Ashdown Group: A highly successful, int...
Day In a Page
A four-bedroom apartment on the ground floor of a stunning period property in North Yorkshire, with two kitchens and a large south-west facing garden.
This high-spec two-bedroom home is part of a smart collection of new flats at Beaufort Park and has a large decked balcony that's perfect for summer drinks.
Capitalise on the fabulous views of Trevone Bay by taking two homes and creating one spacious boutique B&B. Just a cliff-top walk from Padstow.
Overlooking a golf course, this six-bedroom Edwardian detached home spans four storeys and retains many period features including the original, operational servants' bells...
On the edge of the city, this six-bedroom home comes with an outdoor swimming pool and a large garage block that has annexe potential.
In a Grade II-listed manor just outside of Bath, this three-bedroom home is arranged on two floors with a skylight in a vaulted roof line.
Open the living room's bi-fold wooden doors to reveal a retro-style kitchen, and a conservatory leading to a paved garden at this three-bedroom home.
A Grade II-listed, four-bedroom home, in a charming Somerset village, with a two-storey studio that could be converted into a holiday cottage
A modern four-bedroom Victorian home, within walking distance to the high street
A luxury apartment in the Gothic mansion of Wyfold Court in Kingwood, offers six bedrooms spread over three floors and a turret
This school conversion, near Stockwell Tube, oozes New York loft style. The one-bedroom flat features double height ceilings and exposed brick work
This six-bedroom Georgian home is on three floors with open fireplaces, a two-oven Aga, an annexe, and cottage gardens with outbuildings and a car barn
High Crest House covers an impressive 9384sq ft, with almost three acres of grounds including a tennis court and summer house enclosed by electric gates
A six-bedroom farmhouse with separate accommodation in converted stables. Situated in the village of Church Aston, within walking distance to the market town
A two-bedroom flat with under-heated walnut floors and bespoke built-in storage. The Tube and Clapham Common are a short stroll away
A refurbished seven-bedroom townhouse with staff quarters, cinema room, superb gym, steam room and plunge pool
A minimnalist four-bedroom home designed to the highest spec, featuring glass walls and a kitchen space lit by a glass roof
Hibernate during winter and make your living during the summer at this busy guesthouse with panoramic sea views, in the village of Lynton
A four-bedroom penthouse next to the Tate with direct views of St Paul's from two floors of luxurious living space
A four-bedroom detached home surrounded by spacious gardens and woodland, close to New Pudsey
An 18th-century, three-bedroom home near Langstone Harbour built from ships beams with vaulted ceilings and wood burning stoves
A five-bedroom semi-detached home with a mix of period and modern features in a popular and convenient location
This five-bedroom red-brick beauty overlooks the village green and sits in just under two acres of land
A three-bedroom villa with self-contained flat, minutes from Lake Windermere
A five-bedroom Victorian home with four receptions, superb gardens and paddock in Pembury
An eight-bedroom house on the south side of the The Green with cinema, wine cellars and summer house
This 17th century beauty is full of rustic cosiness, while the detached home office means you can also run a business
Four exclusive apartments in a Grade II-listed former medical school with 2,275 sq ft of living space and 18ft ceilings
A five-bedroom terraced house on the popular Peterborough Estate, ideally located for both Eel Brook Common and South Park
A state-of-the-art farm-building conversion on the former Cliveden Estate, with 11,420sq ft of internal space, cinema and wine cellar
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
A boutique mews house, set around a central courtyard, with three bedrooms and a private roof terrace
A four-bedroom farm-conversion with three bathrooms and two reception rooms
A two-bedroom detached house with ensuite bathrooms and a sun-drenched decked terrace, £750,000
A modern and spacious two-bedroom, penthouse flat with two bathrooms in a prestigious development
A beautifully renovated five-bedroom terrace with three reception rooms and a courtyard garden, £700,000
A four-bedroom period house which has been extended to provide almost 2,500sq ft of living space, £675,000
A pretty three-bedroom Georgian home with a 22ft drawing room and a master suite with a balcony, £525,000
A substanstial family home with five bedrooms and landscaped gardens in the much sought-after Branksome Park area
A well-presented three-bedroom house with front and rear gardens, close to White City station, £475,000
A handsome five-bedroom house in a sought-after location close to the city centre
A five-bedroom country home with valley views, equestrian stables and 27 acres of land, £725,000
A six-bedroom farm house with separate, detached cottages and 371 acres of land
A two-bedroom cottage with parquet floors, chunky beams and an open fireplace
A three-bedrrom flat with 2,733sq feet of living space, a beautiful private garden and 15 acres of communal grounds
A four-bedroom chalet bungalow with three bathrooms and a spacious garden, £525,000
A two-bedroom flat with an open plan kitchen and two balconies, close to Arsenal station