Plastic card fraud to hit £500m

Plastic card fraud to hit £500m

Figures to be released by the UK's Association for Payment Clearing Services (Apacs) next week are expected to show that fraud commited on plastic payment cards smashed through the £500m barrier for the first time in 2004.

According to press reports, Apacs expects total card fraud for 2004 to be between £500m and £550m, compared to £402.4m in 2003.

The figures will reveal that fraud committed on cards intercepted by thieves in the postal system during the first half of the year hit £61.2m, a 50% increase on the year before. The number of payment cards stolen in the post soared last year after banks posted out millions of chip-based cards to replace magnetic swipe cards ahead of the 1 January 2005 deadline for the national switch to chip and PIN.

The move to chip and PIN is also thought to have resulted in a sharp rise in incidents of ID theft in the second half of the year, as criminals looked for more elaborate ways of committing fraud.

Apacs claims card fraud would have reached £800m by the end of 2005 if the chip and PIN system had not been introduced.

A spokeswoman for Apacs told reporters that fraud losses are expected to rise because fraudsters are trying to make as much money out of the system before chip and PIN is fully in place and are also targeting cards in other ways.

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