Chip and PIN produces big fall in credit card fraud

Click to follow

Debit and credit card fraud fell by almost a quarter during 2005, the first full year of the new chip and PIN technology introduced by plastic providers. Apacs, the UK payments association, revealed yesterday the total amount of fraud committed on plastic fell to £439m last year, down 24 per cent from £505m in 2004.

Apacs said the launch of cards that require the holder to authorise transactions using a personal identification number (PIN), rather than by signing a receipt, had produced dramatic results.

Cards with built-in computer chips are harder for conmen to fake and criminals usually need a correct PIN to use plastic fraudulently. As a consequence, the amount of fraud committed on counterfeit cards fell 25 per cent to £97m last year while losses from stolen or lost cards were down 22 per cent to £89m.

Fraud committed by criminals intercepting cards sent in the post also fell sharply, partly because such plastic is harder to use without a PIN.

Sandra Quinn, of Apacs, said: "These figures show chip-and-PIN is doing its job. We would expect to see further reductions in fraud in the years head."

However, Apacs said card-not-present crime, where conmen use stolen account information to buy goods and services fraudulently over the telephone or on the internet, rose 21 per cent to £183m last year.