Cashpoint crime up as chip 'n' PIN cuts fraud

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The Independent Online

New "chip and PIN" technology has proved so successful in combating criminals that total debit and credit card fraud in the UK fell 5 per cent during the first half of the year. Apacs, the UK payments' association, revealed yesterday that the technology, which became compulsory in February, had prevented enough fraud to offset the value of increases in scams where chip and PIN is not used.

Total card fraud fell from £219.5m in the first half of last year to £209.3m during the six months to the end of June 2006. Almost half the total is now accounted for by "card-not-present" fraud, where chip and PIN technology is not possible.

Card-not-present fraud - typically where criminals use other people's credit card details to commit fraud online, by phone or by post - rose by 5 per cent to £95.3m during the first half of the year.

There is also increasing evidence that fraudsters are targeting cashpoint crime or overseas markets, now that chip and PIN is preventing them using lost or stolen plastic.

The overall fraud totals include £39.6m of money stolen by cashpoint crime of one type or another, a 37 per cent increase on last year. The numbers also include £48.5m of fraud committed abroad, up 37 per cent, most often in countries that have yet to introduce chip and PIN systems.

Sandra Quinn, a director of Apacs, said people would have to take greater responsibility if debit and credit card fraud is to be further reduced. "Each and every one of us can help defeat the fraudsters and protect our cards and online accounts, by keeping our PINs, passwords and personal information safe and secure," she said.

Leading banks are working on new systems designed to crack down on card-not-present fraud. In addition to asking retailers to request additional information from online and telephone shoppers, the banks also hope to introduce hand-held card readers that customers would use at home. The devices could be tested as early as next year.

Apacs also warned yesterday that fraudsters are stepping up efforts to steal bank account and other financial information using "phishing" e-mails. There was a 1,471 per cent increase in the number of phishing incidents reported during the first half of the year, though online banking fraud remains relatively small-scale, accounting for £22.5m during the six months to the end of June.