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Online fraud up but card fraud down
Chip and PIN bites...

By Tim Ferguson

Published: Thursday 15 March 2007

Card fraud losses fell in 2006 but online card-related fraud once again increased as fraudsters continued to target online transactions.

Total losses through card fraud fell by three per cent in 2006 - from £439.4m in 2005 to £428m - according to the UK payments industry body Apacs.

An Apacs spokeswoman said this fall is mainly due to the introduction of chip and PIN payment tech in the UK.

Card fraud losses at UK retailers fell by 47 per cent – meaning a fall of £146.7m in just two years.

The spokeswoman said: "It's [chip and PIN] having the effect that it was brought in for."

But card-not-present fraud continued to increase - by 16 per cent to £212.6m - making up nearly 50 per cent of all card fraud losses.

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Online banking fraud losses also rose in 2006, leaping by 44 per cent to £33.5m.

Because online fraud is a relatively new phenomenon, the Apacs spokeswoman said it is still something that could continue to rise. But she added people are becoming more aware of the issues so "only time will tell".

The banking industry is working on the next generation of fraud prevention for card-not-present transactions - such as a handheld chip and PIN device developed by MasterCard and Visa, for use with internet shopping.