Chip and PIN leads to fall in UK card fraud

UK card fraud has fallen by 13 per cent to £439.4m in the 12 months since the introduction of chip and PIN technology, according to the latest figures from payments industry body Apacs.

But while chip and PIN has helped reduce card fraud on the high street, the figures show criminals have turned their attention to the internet, phone and mail order transactions with a 21 per cent rise in card-not-present fraud to £183.2m in 2005.

Online banking fraud losses have also doubled in the last year to £23.2m because of the rise in email phishing scams that dupe customers into disclosing their bank security details.

Apacs figures on card ID theft also contradict Home Office claims that ID fraud costs the UK almost £2bn each year. Following rises in previous years, 2005 actually saw a fall in the level of card ID theft by 17 per cent to £30.5m. Apacs said card ID theft in the UK remains a very small proportion of overall fraud at just under seven per cent.

Sandra Quinn, director of corporate communications at Apacs, said the banking industry is now discussing how to use chip and PIN technology to tackle fraud on card-not-present transactions.

She said in a statement: "Seeing card fraud losses come down is cast-iron proof that chip and PIN is doing its job. Back in 2002 we forecast that fraud would have risen to £800m in 2005 if we didn't make the move to chip and PIN so it's heartening to see total losses well beneath this figure."