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Story URL: http://www.silicon.com/financialservices/0,3800010322,39296612,00.htm

Brits lose £120m to foreign card fraud
Chip and PIN dodging

By Jo Best

Published: Wednesday 01 October 2008

While the three years since the introduction of chip and PIN has seen a cut in the UK's card fraud rate, criminals in European countries - where the technology has yet to be rolled out - are siphoning millions of pounds from UK consumers' cards.

According to payments industry body Apacs, the amount UK retailers lose to card fraud has dropped by around a third since the chip and PIN was adopted in 2005, now standing at £47.4m for the period between January and June this year.

In contrast, £121m was lost during the same period to foreign card fraud, up 11 per cent on last year and nearly 190 per cent on three years ago - occurring mainly in European countries where chip and PIN has not been rolled out and where criminals will typically use stolen UK card details at retailers and ATMs, Apacs said.

Chip and PIN cards are expected to be rolled out in Europe by 2010. In the meantime, Apacs recommends consumers sign up to secure online payment services such as Verified by Visa and MasterCard SecureCode, which currently have around 25 million users in the UK.

Criminals are also targeting other channels where they can make transactions without chip and PIN, including phone, internet and mail order, where fraud increased to £161.9m, up 18 per cent on last year.