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13 million people in the UK have been affected by card fraud

Ever been a victim of card fraud?

If you haven’t than you are perhaps luckier than you think you are, or you are already taking steps to protect your valuable financial information.

According to our latest CPP research, 28% of adults have now been a victim of card fraud in the UK. When you do the maths this means that over 13 million people have been a victim of card fraud in the past, which is a worrying statistic.

When we broke the figures down over the last twelve months, we found out that seven per cent of adults claimed to have been a victim, or just over 3.5 million people affected. This is actually a three per cent decrease year-on-year, but it shows that card fraud is still a significant problem.

Looking at which cities in the UK reported the highest incidence; Brighton came out top with 38 percent of residents saying that they had fallen victim to card fraud in the past, followed by London (34%), Manchester (33%) and Bristol and Leeds at 32%.

Whilst you can understand why the large cities such as London and Manchester registered such high incidences of fraud, Brighton’s inclusion could be considered surprising. When we looked at what is driving card fraud, however, it may help to explain its prominence.

Card cloning or counterfeit fraud is the most dominant type of fraud affecting 20% of victims. Counterfeit fraud occurs when a fake card is created by fraudsters using compromised details from the magnetic stripe of a genuine card. Although tampered ATM and Chip and PIN machines can facilitate card cloning, letting your cards disappear out of sight in a restaurant, bar or shop can be an opportunity to copy its details – and according to the survey 17% of 18-24 year olds in Brighton exactly do this.

The research also shows us that 18-24 year olds tend to be the least security conscious overall with only 37% checking their bank statements on a regular basis, verses 67% of people aged 65+. This younger demographic are also more likely to not shield their PIN number at an ATM and check an ATM for tampering, but let other shop online with their cards and share their PIN details with other people.

Online fraud was also just as big a problem as card cloning affecting 20% of victims. Across the UK, card-not-present (CNP) fraud remains the dominant type of card fraud with total losses of £266.4 million in 2009. Perhaps consistent with their frequent online spending habits, adults aged 18-24 were three times more likely to lose their cards details via the internet (33%) as opposed to people aged 65+.

When we looked at how much victim had taken from their accounts, the average sum defrauded was £417, with four per cent reporting losses of more than £2,000. Positively this fraud statistic is down on the 2009 average figure of £590 and is consistent with the recent fall in losses over the last eighteen months reported by the UK Payments Association.

When we asked victims how long it took them to report the loss or theft of their payment cards, the average time was 533 minutes or nearly nine hours. Encouragingly 40 per cent cancelled lost and stolen cards within the hour, but 46% took up to 24 hours allowing fraudsters ample time to clone, or use the stolen card online.

Not surprisingly, and despite the Payment Services Regulations covering card fraud victims for all financial losses – as long as they haven’t acted with unreasonable care – card fraud is considered a highly distressing event. 35% of victims said they were stressed, 40% upset and 73% angry. 14% said it caused them financial problems and 10% were depressed by the experience.

The 2010 annual UK Payments Association card fraud statistics will be out in March this year. It will be interesting whether the reduction in financial losses can be sustained, or the recovering economy will see increased fraud losses as more credit is made available. Whatever the official statistics and the industry initiatives to reduce fraud, it can only work if consumers themselves are responsible and take sensible and proactive measures to look after their financial cards and information.

 

 

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